Meralco blasts bourse over trade suspension

01/07/2009

Dominant power distributor Manila Electric Co. (Meralco) complained yesterday that the indefinite trading suspension imposed by the Philippine Stock Exchange (PSE) on its shares has caused “grave, irreparable damage and losses” to the power company.

Meralco corporate secretary Emmanuel Sison wrote PSE president Francis Lim saying the trading suspension has affected the entire block of 1.1 billion Meralco shares in the exchange while a dispute that resulted in the suspension involved only 42.2 million shares.

The PSE issued the suspension last Dec. 17, 2008, following the controversies involving about 42.2 million canceled Meralco shares owned by state-owned Land Bank of the Philippines (Landbank).

“The exchange, in its action to suspend the trading of all the 1.1 billion Meralco shares, appears to be favoring one stockholder against 58,926 other stockholders allegedly to protect the interest of the investing public and preserve the integrity, stability and sanctity of stock market transactions,” Meralco said.

The company asserted that Meralco shares under a dispute between Josefina Lubrica and the Landbank involved 42 million shares out of a total 1.1 billion common shares issued as of Nov. 30.

“And Lubrica or Landbank is only one stockholder against 58,926 other existing shareholders (with combined shareholdings of 1 billion) who have nothing to do with the Lubrica-Land Bank dispute but are adversely affected by the indefinite trading suspension,” Meralco said.

At the same time, Meralco stressed that PSE’s action appears to show it is favoring one stockholder over all other stockholders “when it has the authority, capacity and machinery to identify and isolate the 42 million shares in dispute.”

But Lim, in a statement issued last December, belied speculations that the PSE was influenced, for political or sinister reasons, in suspending the shares of Meralco.

“We fully recognize that the issue surrounding the MER shares and the consequent suspension of its trading therewith has inconvenienced Meralco share-holders. But we would like to assure everyone that there was nothing political or sinister behind the Board decision. Our Board, acting as a collegial body, adopted in utmost good faith this painful decision solely to protect the investing public and maintain the integrity of our stock market,” Lim said.

The PSE suspended the trading of Meralco’s shares following the cancelation of stock certificates of Landbank which were then issued to Lubrica, based on an order from the Department of Agrarian Reform Office of the Regional Adjudicator Region IV.

Meralco in its comment to the PSE asserted that “since the cancelation and the issuance of new stock certificates are based on an involuntary sale and the final decision of Supreme Court, the consent of Land Bank of the Philippines is not necessary to transfer the subject shares in the name of the purchaser at public auction.”

Meralco also confirmed that Landbank’s stocks was canceled and transferred to Josefina Lubrica, but this was “in compliance with the Demand to Comply issued by the Sheriffs of DAR (Department of Agrarian Reform) Adjudicator Conchita Minas and based on the execution sale of the above shares of stocks allegedly conducted by the Sheriffs of Regional Adjudicator Minas on Oct. 24 and 25, 2005.”

Referring to the Supreme Court en banc resolution date July 31, 2008 in G.R. No.169008 entitled Land Bank of the Philippnes, petitioner vs Raymunda Martinez, the distribution giant pointed out that the cancellation and issuance of new stocks was in compliance with the ruling of the SC.

“Being a party to the cases mentioned, the Land Bank of the Philippines had actual knowledge of the reason for the cancellation of its stock certificates and the issuance of new stock certificates in favor of Josefina S. Lubrica,” the company further said.

The Meralco shares of stocks transferred to Lubrica totaled 42,002,750 shares. The stock certificates were numbered 87265, 664638, 707447 and 707448.

Landbank earlier said the stock certificates “were canceled by Meralco, without prior notice to or consent by the Land Bank of the Philippines, on Nov. 28, 2008.”

Landbank further stated that “any sale, assignment, transfer or any transaction in connection with or involving the shares of stocks of the Land Bank of the Philippines, whether the covering stock certificates are in the name of the Land Bank of the Philippines, Josefina S. Lubrica or any other person, are also null and void and in violation of the above Resolution of the Supreme Court.”

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