Biz Buzz: PSE-PDEx merger deadline looms

IF THE Securities and Exchange Commission fails to act on the proposed merger of the country’s stock and bond exchanges in three days, the P2.2-billion deal—which has been years in the making and has been pending with regulators for almost a year now—will collapse.

That’s right. The agreement between the Philippine Stock Exchange (PSE) and the Bankers Association of the Philippines (the controlling stakeholder of Philippine Dealing and Exchange Corp.) is set to expire on Nov. 27, 2015.

That would be a shame since a lot of time and resources have been poured into this deal by all stakeholders, getting various personalities to subsume their egos (and egos of the major players in the financial world are notoriously big) for the greater good.

More importantly, the deal—which is on the verge of being consummated, needing only one final approval from the SEC brass—had the imprimatur at the outset of no less than Finance Secretary Cesar Purisima and Bangko Sentral ng Pilipinas Governor Amando Tetangco Jr.

“It’s (the reason) this deal happened in the first place,” one bank president told Biz Buzz Tuesday. “They were very supportive.”

But that support apparently doesn’t count for much when it comes to moving the commissioners at the SEC to agreeing to the plan, which requires the corporate regulator to exempt the merger from the 20-percent cap, mandated by the Securities Regulation Code, on one bourse owning another (because the merged entity will result in PSE owning 95 percent of PDEx).

If the deal falls through sans an SEC approval, negotiations for the merger of both exchanges will go back to square one and all the time and effort thrown in over a period of almost three years will be for naught. And given the level of exasperation and exhaustion on all sides, no one will have the energy for another go at it.

The Philippines will also take two steps back in the effort of both the public and private sectors to modernize the country’s financial system and deepen its capital markets.

According to one banker, all eyes are now on Purisima, given his power and influence as the de facto head of the economic team of the Aquino administration.

“At this point, he’s the only one who could make this deal happen,” said the banker, pointing to the fact that the corporate regulator falls under the supervisory powers of the Department of Finance. He added that most of the SEC’s commissioners—including, our sources say, the one official who has vocally opposed the merger—were vetted with the finance chief before they were appointed.

With time running out, it seems only Purisima can save the day.

Fingers crossed, ladies and gentlemen. Daxim L. Lucas

Injuction vs Ayala Alabang gates

THE AYALA Alabang Village Association (AAVA) has suffered another legal setback in its crusade to open additional village gates.

Acting on a petition filed by subdivision developer Ayala Land Inc. (ALI), the Regional Trial Court (RTC) of Muntinlupa issued a writ of preliminary injunction preventing the association from using the newly constructed San Jose and Champaca Streets gates.

“The demolition of the perimeter fences and the eventual construction of the gates complained of in these road lots without the consent of ALI as owner thereof, are acts which to the mind of the court would not only destroy the reputation of ALI as a developer of first-class subdivisions but would also continuously threaten the security of the residents of AAV if said acts would remain unabated,” said RTC presiding judge Juanita Guerrero in a ruling issued on Nov. 17. “The damage, which the opening of these gates may result therefrom, are incalculable and irreparable, to say the least.”

AAVA demolished in October the perimeter walls at the dead end of the two streets and constructed two gates—backed by many residents, but mostly opposed by those residing near the demolished walls.

For its part, AAVA argued that the RTC had no jurisdiction over this case, claiming that questions in connection with subdivisions must be handled by the Housing and Land Use Regulatory Board (HLURB), which had more expertise in dealing with issues of this kind.

The association also claimed that ALI had “ceased” to be the owner of the road lots in question, alleging the property giant’s failure to donate these roads and open space after their completion in the 1990s to the local government unit.

On the question of jurisdiction, the court noted that the complainant in this case was the developer itself and not the subdivision or condominium buyers, asserting its jurisdiction on this case. Quoting the existing rules of court, the RTC judge said: “The twin requirements of a valid injunction are the existence of a right and its actual or threatened violations.”

The court also rejected AAVA’s argument that ALI no longer owned the disputed lots, noting that the contracts of lease as well as the various communication exchanges between ALI and AAVA had “clearly” recognized that ALI was still the owner of these road lots as well as open spaces and parks.

“The court cannot just allow a party to acknowledge the ownership of one party and then deny later on its authority over the road lots to suit their purpose,” the court said.

This preliminary injunction is so far the fifth layer of barrier hounding AAVA, following the earlier temporary restraining order obtained by ALI, the cease and desist order issued by the HLRUB on the referendum on the opening of the gates, the notice of violation issued by the Muntinlupa Office of the Building Official due to construction of gates without permit, and the nomination and election committee’s disavowal of the referendum.

But not conceding defeat amid these legal roadblocks, AAVA president Epifanio Joaquin said in the village newsletter: “Needless to say, the AAVA board and its lawyers will do what is necessary to defend our residents.” Doris Dumlao-Abadilla

Early recognition

FOR SEVERAL years now, it has been a tradition in the exclusive and influential Management Association of the Philippines (MAP) to name the governor of the Bangko Sentral ng Pilipinas as the group’s awardee for its annual “Management Man of the Year” citation.

For the uninitiated, the Management Man of the Year is the highest recognition given by the country’s most elite group of corporate CEOs, citing the awardee for his/her extraordinary skills in the world of business.

And so it has been customary to give the award to central bank governors at or toward the end of their terms, especially if they exhibited deft skills in handling crises or managing the economy. After all, the businessmen who form the MAP would not be able to make money if the central bank didn’t keep inflation in check and foreign exchange rates predictable.

Past central bank governors who have been named MAP Management Man of the Year included the late Jose “Jobo” Fernandez, who helped steer the country’s economy during the debt moratorium years of the 1980s; Gabriel Singson, who helped stabilize the ship in the wake of the 1997 East Asian financial tsunami; the late Rafael “Paeng” Buenaventura, who was cited for being “the only adult in the room” during the tumultuous presidency of Joseph Estrada, and Jose Cuisia Jr. (now Philippine Ambasador to Washington), who only got his award 15 years after his term ended, supposedly because he rubbed too many people the wrong way in his push for banking reforms.

But this year’s awardee—BSP Governor Amando Tetangco Jr.—may very well be the exception to this rule.

The current governor received his Management Man of the Year plaque from the MAP during a luncheon Tuesday at the Manila Polo Club attended by the who’s who of Philippine business, two years before he relinquishes the helm of the central bank.

One could argue that Tetangco should have received the award a few years ago at the end of his firm term as BSP governor, but we at Biz Buzz consider it an early reward for a job well done.

Incidentally, just as businessmen and bankers love to talk about who the country’s next president will be come 2016, they’re already talking about and making bets as to who the next central bank governor will be come 2017. They are both excited and worried. Daxim L. Lucas

E-mail us at [email protected]. Get business alerts and a preview of Biz Buzz the evening before it comes out. Text ON INQ BUSINESS to 4467 (P2.50/alert).