An uproar erupted at the Securities and Exchange Commission a few days ago after chair Teresita Herbosa—taking to heart a reminder from the Department of Finance not to accept gifts especially this Christmas season (and even after)—directed guards to shoo away the gifts sent to the SEC offices. Signs saying “SEC adopts a no-gift policy” were put up right at the entrance of the building and the elevators.
“It was really insulting to the staff because the message seemed to have been that management feels that they are beholden to the gift-givers who gave umbrellas, ball pens and planners and because of that they can’t be objective in what they do,” a source from SEC said, adding it was like Christmas was banned at the government office.
Another SEC source said: “Ask any employee of SEC. We don’t ask for gifts in exchange for services,” adding that it was rude to turn away even the umbrellas. “The really expensive gifts like flat screen TVs are rare and usually raffled off. But the majority shouldn’t suffer.”
After drawing much flak, however, the SEC en banc decided—in their meeting last Thursday—to recall the outright ban on gifts. Instead, the en banc decided to set up guidelines allowing gifts under certain conditions. For instance, those nominal in value and not solicited by a government employee are deemed acceptable.
“The policy is not new in that it’s already provided by law (anti-graft law). The SEC rules are intended for better and easier implementation of the law and policy,” Herbosa told Biz Buzz. The guidelines set by the en banc, she said, was “in accordance with the law.”
The slight change of heart at the SEC, some staffers theorize, may have been influenced by a Dec. 7 column written by Inquirer columnist Raul Palabrica—himself a former SEC Commissioner—who wrote about the gift-giving tradition in his Dec. 7 column: “A total embargo on gift-giving to government employees is an overkill, or to use street lingo, overacting. As long as the gifts conform to the standards of reasonableness or are of nominal value under the attending circumstances, the spirit of Christmas gift-giving should be allowed to have its rightful fill.”—Doris C. Dumlao
LTG complies
With the Philippine Stock Exchange hell-bent on suspending companies that do not meet the minimum public float requirement, and with the Bureau of Internal Revenue having issued the dreaded revenue regulation lifting the preferential tax rates on trades of shares outside the exchange, the Lucio Tan Group scrambled to comply with the 10-percent minimum public float by placing out shares last Friday.
About 508.54 million secondary LTG common shares were sold to outside investors at about P13 per share on an 11th hour P6.6 billion equity deal. The transaction, which was crossed through PNB Securities, jacked up LTG’s public ownership to 10.4 percent from the previous 4.75 percent, thereby meeting the requirement of the Philippine Stock Exchange.
Several other blitzkrieg equity deals are expected during the run-up to the New Year as immediately after Dec. 31, the PSE will impose a trading suspension on the shares of noncompliant listed companies for a period of not more than six months, or until June 30, 2013. If after June 30, 2013, a listed company remains noncompliant, the listed company’s shares will be delisted automatically.
The BIR, as contained in its recent rule issuance relating to the minimum public ownership rules, will impose a capital gains tax and a documentary stamp tax (DST) on every sale, barter, exchange or other disposition after Dec. 31 of shares of noncompliant listed companies. A capital gains tax equivalent to 5 percent of the net capital gains amounting to not more than P100,000 will apply while a 10-percent capital gains tax will apply on the excess. Also, the DST of 75 centavos on each P200 of the par value of the stock will also be applied on the sale. In contrast, trading of shares listed and traded at the PSE are subject to a stock transaction tax equivalent to only 0.50 percent of the transaction value levied on the seller.—Doris C. Dumlao
No deal
From most indications, the courtship between the Ayala-controlled Bank of the Philippine Islands and Philippine National Bank of tycoon Lucio Tan is over.
“The deal will never happen,” a source told Biz Buzz, adding that no less than “Kapitan” (the tobacco and beer magnate’s nickname in the business community) has vetoed the deal.
According to the source, the ideal situation for Kapitan would have been to remain on, more or less, equal footing with the Ayala group in the bank—the largest in the country—that would emerge from the union.
In particular, what Kapitan wanted was a deal akin to the union between Philip Morris and Fortune Tobacco (where Philip Morris for 50 percent plus one share), or San Miguel’s entry into Philippine Airlines (where the conglomerate got 49 percent and management control).
No less than Kapitan’s most senior legal adviser gave him the bottom line, given that the merger would result in the tycoon holding only a 20-percent stake.
“If you let this happen, you won’t have a bank,” the legal adviser supposedly said. Case closed. Deal dead.—Daxim L. Lucas
‘Lambo’ in limbo
An orange Lamborghini Aventador is gathering dust at a Customs warehouse instead of leaving other cars in its dust at the Subic-Clark expressway.
This $400,000 exotic car was brought in at the Ninoy Aquino International Airport and declared as a diplomatic car by one of the Middle Eastern countries with an embassy in Makati earlier this month. Although customs officials were mesmerized by what has been widely dubbed as the “best Lamborghini ever”, they could not shake of the stink from the privileged importation and immediately placed it on hold. They asked: What government would allow its diplomatic official to enjoy such lavish lifestyle?
Under the Vienna Convention, embassy officials, members of the diplomatic corps and international organizations are allowed to bring in vehicles into the country tax- and duty-free, which explains why the diplomatic circuit has long been suspected of being a smuggling route. Authorities believe the embassy official is just a conduit, with the real buyer trying to scrimp on taxes.
Unless Customs officials are convinced that an embassy needs a 700-horsepower service vehicle, this cool car will have to stay parked with other “hot” goods this Christmas.—Gil Cabacungan
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