SEC wants disclosures on foreign equity enhanced
THE Securities and Exchange Commission (SEC) may begin requiring additional disclosures from companies following a Supreme Court ruling on foreign ownership, an SEC official said on Thursday.
In an interview on the sidelines of the “2009 Corporate Governance Trends in the 100 Largest Publicly Listed Companies” in the country, SEC chair Teresita Herbosa said they would have to require certain firms to disclose in detail the classes of shares that they are issuing stockholders.
“If the decision becomes final, we would have to require the [affected] companies to disclose whether or not their preferred shares are voting or non-voting, and we will compute accordingly,” Herbosa said.
Some of these affected companies are in public utilities, education, natural resources, and in nationalized and partly nationalized activities.
The new requirement stems from a recent ruling by the SC saying that the Philippine Long Distance Telephone Co. (PLDT) may have breached Section 11, Article 12 of the Charter, which mandates the 60-40 ownership rule in a Philippine corporation.
The high court ruled that the term “capital” in the provision refers only to common stocks — which gives shareholders voting rights to elect board directors — which, when strictly enforced, elevates foreign ownership in PLDT to 64 percent breaching the 40 percent ceiling.