Biz Buzz: Airport scramble
Apart from the San Miguel and First Pacific groups, the Gokongwei family is also scouting for opportunities in infrastructure, particularly in airport terminals that will be privatized by the government. No surprise there really, considering potential synergies with its budget carrier Cebu Pacific.
The Gokongwei group is specifically setting its sights on the Ninoy Aquino International Airport (Naia) and the Diosdado Macapagal International Airport (DMIA), which could be the main gateway to Metro Manila in the future. A source from the family told Biz Buzz that the Naia privatization would be a lot more lucrative, however, if all three terminals would be handed out to a single private sector concessionaire instead of bidding out Naia terminals 1, 2 and 3 on a piecemeal basis.
After the deal ceding to the First Pacific group control of telco unit Digitel, which operates the Sun Cellular network, JG Summit has the leeway to consider other ventures. Under the agreement, JG Summit will receive a 12.8-percent stake in PLDT’s enlarged capital, which will be reduced to 10 percent following the sale of a portion of the stake to NTT Docomo. JG’s stake in PLDT will be further reduced to 8 percent as the First Pacific group will also buy additional shares in proportion to NTT Docomo’s purchase.
The next question now is how long JG Summit will hold on to the PLDT stake and what other grand plans tycoon John Gokongwei Jr.—who has seen a dramatic improvement in asset value in 2010 ($2.4 billion)—has for the future.—Doris C. Dumlao
Questionable Picpa docs
Some key accounting players and officials of the Philippine Institute of Certified Public Accountants (Picpa) face grave career peril. They can either lose their jobs and clients or go to jail, or both, if the rumor mill is to be believed.
It all started in 1996 when the then incumbent Picpa board—mandated to extend the corporate life of the accounting organization that was due to expire on April 27, 1997—submitted documents to the SEC for the extension, saying this was approved at a board meeting and subsequently ratified by its members. The SEC approved the extension for another 50 years.
Now, based on documents that will be used to take these officials to account for their action, it appears that the supposed board meeting and ratification may not have taken place at all.
According to some members of a so-called Reform Bloc of the group, the issue is how the public can trust officials who sign off on financial statements of listed corporations, if they are capable of alleged falsification.
Should the SEC revoke its approval since it was misled, and since the basis of its approval is allegedly tainted? Should existing clients of these people move to other accounting firms? Or just drop the soon-to-be-named executives? The bigger issue is: What should the SEC and the accounting profession do to prevent a repeat?
Good governance has been the battle cry of organizations like Picpa. Are they putting their money where their mouths are? According to our source, a formal complaint is now being drafted. Watch out for some big names next week.—Daxim L. Lucas
Valedictory
Word on the street is that Elizabeth Lee—the recently resigned head of Nissan distributor Universal Motors Corp. and the Chamber of Automotive Manufacturers of the Philippines Inc. (Campi)—is a leading candidate to replace Lito Alvarez at the Bureau of Customs.
This possibility has left a few of the dragon lady’s critics concerned.
In a valedictory news release announcing her simultaneous resignations from UMC and Campi, Lee painted a rosy picture of the company she was leaving behind after 11 years. She highlighted her legacy to Campi, the country’s biggest organization of vehicle manufacturers, which she led for six years. One Campi official, however, questioned Lee’s claims, given the rift in the organization that resulted in the organization’s bitter break-up into three groups—the original Campi, the Philippine Automotive Competitive Council Inc. (composed of Japanese automakers), and the recently formed breakaway group, the Alliance of Vehicle Importers and Distributors.
The official added that some Campi members heaved a sigh of relief at Lee’s departure, whose leadership he described as a virtual “one-woman show.”
As to rumors of Lee’s impending appointment as Customs commissioner, the source said he wished President Aquino and Finance Secretary Cesar Purisima “the best of luck”—with some trepidation, of course.—Daxim L. Lucas
Overconfidence in Kantar?
As expected, one cannot write about ABS-CBN’s ratings position without arousing an equally strong response from its main rival, GMA 7.
Indeed, the latter has pointed out recently that the Kapamilya station has been trumpeting its lead in the ratings survey administered by Kantar Media, formerly known as TNS, despite ABS-CBN being the only local major TV network subscribing to this ratings service provider.
According to GMA 7, it relies on the data of Nielsen TV Audience Measurement, which is “trusted by more broadcasting and advertising brands in the local and international market.”
Nielsen also has a bigger sample size in Mega Manila (880 versus 770 homes) and National Urban Philippines (2,005 versus 1,370 homes) compared with that of Kantar.
GMA 7 points out that Nielsen’s data tell an entirely different story from that of Kantar’s. In Total Urban Luzon, where more than three-fourths of television households nationwide are found, Nielsen data show that GMA 7 continues to get a lion’s share with its lead in household share increasing from 6.4 points in May to 6.9 points from June 1 to 15.
Contrary to ABS’ claims that they won over GMA 7 in primetime household share in Mega Manila, an area particularly important to advertisers as it comprises 58 percent of total television households in the country, Nielsen proved that GMA 7 was still ahead by 1.1 points in May, according to the Kapuso network.
“GMA likewise cemented its credibility and trustworthiness as flagship primetime newscast 24 Oras, bannered by the tandem of Mike Enriquez and Mel Tiangco, led ABS-CBN’s TV Patrol in Mega Manila and Total Urban Luzon by 1.7 points and 0.5 point, respectively, this May,” it added.
Somehow we have this feeling that we haven’t heard the end of this issue.—Daxim L. Lucas
ICD citations
The Institute of Corporate Directors (ICD)—made up mainly of parties committed to the professional practice of corporate directorship, in line with global principles of modern corporate governance—has given a special citation to three former financial market pillars in the country.
ICD gave former Securities and Exchange Commission Chair Fe Barin, former Philippine Deposit Insurance Corp. president Jose Nograles and former Philippine Stock Exchange president Francis Lim special recognition for their “invaluable contributions in promoting corporate governance in the Philippines.”—Doris C. Dumlao
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