Misleading public ownership reports
AYALA Corp. (AC) will hold at 9 a.m. today (Friday) its annual stockholders’ meeting. Most of, if not all, the public - ticipate in the election of the members of the company’s seven-person board.
Again, like in the past, the public does not have its own nominees to AC’s board. Their seats have been reserved to three independent directors, who, like the regular directors, are also management nominees.
Like Jaime Augusto Zobel de Ayala, chairman of the board, and - rector will also be reelected. They are Yoshio Amano, who represents Xavier Loinaz, Antonio Jose Periquet, and Delfin Lazaro. The last three are AC’s independent members of the board.
AC’s computation
- voting shares divided into 619.614 million outstanding common shares and 200 million voting preferred shares. The other classes of AC’s capital stock are 20 million preferred B series 1 shares; 27 million preferred B series 2 shares.
Duediligencer is using only AC’s voting shares.
- ited Mermac Inc. with ownership shares, or 37.052 percent and 159.577 million voting preferred shares, or 19.469 percent.
Mitsubishi, on the other hand, shares, or 7.696 percent; and 32.64 million voting preferred
When recomputed, AC arrived million voting capital stock divided into 69.614 million outstanding common shares; 47 million non-voting listed preferred shares and 200 million outstanding but non-listed voting preferred shares.
By the number
To show the public how Mermac and Mitsubishi ended up in control of Ayala Corp., Duediligencer computed separately the common shares and the voting preferred shares they own vis- à- vis AC’s outstanding common shares and outstanding voting preferred shares. million common shares represent 49.013 percent of 619.614 million outstanding AC common shares, and its 159.577 million preferred 200 million voting preferred shares.
common shares and 32.64 million percent of 619.614 million outstanding AC common shares and 16.32 percent of 200 million AC voting preferred shares, respectively.
Together, Mermac and Mitsubishi hold a total of 366.767 million - lion preferred shares. Together, voting shares.
Common shares only
An AC public ownership report (POR) as of Jan. 15 showed the public as holder of 249.162 million shares, or 40.21 percent of 619.611 million outstanding AC shares.
The percentage is too big to be believed but such is not an AC monopoly. Other listed companies do similar computation resulting in a public ownership entitled to a board seat or more but is denied board representation.
How about getting the ratio of public ownership based on the total number of AC voting shares? This would result in a shares divided into 619.611 million common shares as of date of preferred shares.
ownership, the ratio dropped to 30.40 percent.
The percentage could even be dilut million AC common shares owned by the public were divided by AC’s stock as of Dec. 31, 2015.
Still non-public
Under the rules implemented by the Securities and Exchange Commission, the public should own at least 10 percent of outstanding shares in a listed company.
The problem with this rule lies in the computation. Should the computation to arrive at 10 percent public ownership be based only on common shares?
10 percent minimum public ownership rule so as not to confuse both the investing public and the majority stockholders of listed companies.
As has been the practice, PORs are issued but contain computations that are based only on common shares. How about voting preferred shares, which are usually cornered by the majority stockholders.
In fairness to the Zobels, AC is not the only listed company that resorts to issuing PORs that portray the company to be more public than others. Several other companies do likewise but are allowed to go around the rule strictly watching them. esdperez@gmail.com.