Jackstones’ use of various outstanding common shares
Emeterio Sd. Perez
WHAT do insiders know that public investors who trade on listed common shares of mostly family-owned and controlled corporations do not know at all?
This is the question that should have been asked to company insiders who trade on their own companies’ listed common shares.
This is addressed to the monitoring teams of the Securities and Exchange Commission (SEC) and of the Philippine Stock Exchange (PSE). Is anyone listening to the plea of the public against insiders’ potential knowledge of what could be happening inside the boardrooms?
For instance, Anthony Tantoco Huang, president of SSI Group Inc., bought 100,000 SSI common shares at P2.2827 each on Aug. 20, 2018. After the additional acquisition, his direct holdings in the company increased to 5.792 million common shares or 0.175 percent of 3.311 billion outstanding SSI common shares.
How about Ma. Teresa Rustia Tantoco, who is SSI treasurer? As an insider, she bought 200,000 SSI common shares at P2.29 each; 400,000 SSI common shares at P2.286825; and 2.944 million SSI common shares at P2.2728.
Her additional acquisitions totalled 3.544 million SSI common shares.
As of June 30, 2018, Tantoco owned 467.737 million SSI common shares or 14.126 percent, according to a public ownership report (POR). Of her total holdings, she directly owned 32.736 million SSI common shares and indirectly held 435 million SSI common shares.
Outstanding what?
Jackstones Inc. (JI) reported that, as of Sept. 10, 2018, it had 250.059 million outstanding common shares. In a POR as of June 30, 2018, it said its “number of issued and outstanding common shares totalled 167.559 million JI common shares and 82 treasury shares.
By deducting 82 JI common shares from 167.559 million “issued and outstanding common shares,” Jackstones arrived at 250.059 million as the “number of outstanding common shares.”
Due Diligencer does not know how this happened.
Of 250.059 million outstanding common shares, Jackstones’ nine-member board held 25.136 million JI common shares or 13.35 percent as of Sept. 11, 2018. A computation resulted in the company having 188.284 million outstanding common shares.
However, the same POR credited the public with 29.441 million JI common shares or 11.37 percent. When computed, the result showed the company with 258.939 million outstanding JI common shares.
As of Sept. 12, 2018, Jackstones listed on PSE website 250.059 million common shares as outstanding. Against this number of common shares, 29.441 million publicly owned common shares would be equivalent to 11.774 percent.
Incidentally, the number of outstanding JI common shares varies depending on computations. In the case of board’s ownership of 25.136 million JI common shares, Jackstones used 250.108 million as outstanding common shares.
Due Diligencer’s take
A closer look at other listed companies reveals a number of outstanding common shares much closer to reality.
SM Investments Corp. (SM) attributed to eight directors the ownership of 260.549 million SM common shares, according to the company’s POR as of July 2, 2018.
The board’s ownership of 260.549 million SM common shares is equivalent to 21.64 percent, according to the same POR.
When computed, the result showed SM’s eight directors owning the equivalent of 21.63 percent of 1.204 billion outstanding common shares, which is much closer to the company’s 1,2014,582,867 outstanding common shares.
What if the ratio of ownership is recomputed using the numbers as they appear in SM Investments’ POR? This would give the result of 0.2162978 or 21.63 percent and not 21.64 percent reflected in the POR.
Incidentally, SM’s public stockholders owned 533.572 million common shares or 44.30 percent as of July 12, 2018.
If this is true, then, they, as stockholders, would have been entitled to 44.3 percent of the board and would have been effective in rallying their fellow stockholders to oppose any corporate act that would be inimical to their interest.
Because their common shares are traded by the public, listed companies should get the number of minimum public ownership of 20 percent based on capital stock and not only on common shares.
Will listed companies recompute their public ownership? Just asking.
esdperez@gmail.com
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