043007: PSE to ask SEC for more time to reduce shareholdings of brokers

 

 

The Philippine Stock Exchange intends to ask the Securities and Exchange Commission to again give it more time to look for a way to whittle the shareholdings of stock brokers in the bourse down to the 20 percent ownership cap imposed by the Securities Regulation Code for each industry group. "The PSE board has already done everything that it can to facilitate the sale of more PSE shares but unfortunately, we were not able to get shareholder approval for the waiver of their pre-emptive rights," said PSE president Francis Lim. He explained that the waiver would have allowed the PSE to seek out investors willing to make a strategic investment in the board without fear of having their intended stock acquisition blocked by shareholders exercising their pre-emptive rights. "We cannot force the brokers to sell their PSE shares as this will be interfering with their rights of ownership," said Lim adding that "it will be very cruel for the SEC to penalize us for failure to comply with the ownership cap since we have done everything we can." SEC chairperson Fe Barin agreed that no one can legally force stock brokers to part with their shares in the PSE but held back from commenting on whether the PSE will get another extension since the deadline expires in July. "We will have to review their performance to see what they have done so far," Barin said. PSE chairman Jose Vitug said earlier that the bourse failed to get the approval of the required twothirds of all outstanding shares for the removal of the pre-emptive rights of PSE shareholders. He blamed this partly on the low voter turnout of 70 percent explaining that since two-thirds of all shares are required to approve the amendment, the 21 percent who did not attend the meeting were automatically deemed to have cast their vote in the negative. Vitug pointed out though that the board enjoys the confidence of a majority of PSE shareholders as the proposal to remove the pre-emptive rights actually secured the approval of a majority of 7.34 million shares while only 3.95 million shares opposed the measure. Shareholders led by former Ramon T. Garcia questioned the proposal to remove the pre-emptive right of shareholders pointing out that it is an inherent right of all shareholders. He proposed to defer deciding on the measure but it was later decided to put it to a vote and let all shareholders decide on the issue on their own. Lim said shareholders who opposed the amendment are hesitant to allow a permanent or blanket removal of their pre-emptive rights but would rather have the board seek their approval for specific instances when the PSE will sell its shares.

 

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