The dispute between Alliance Select Foods International Inc. management and a group of minority shareholders has escalated with the Singaporean investors in the company filing a case for syndicated estafa and falsification of public documents against present and former corporate executives.
This was the charge filed before the City of Manila Prosecutor’s Office that held a hearing on March 22, 2016 on the complaint of Alliance minority shareholders Victory Fund Limited, Harvest All Investment Limited, Bondeast Private Limited and Hedy S. C. Yap Chua.
Named respondents to the complaint are Jonathan Y. Dee, who was president of Alliance from its incorporation and also served as chairman of Alliance’s Board of Directors from end-2014 to February 2016 and president from 2008 to 2015; Alvin Y. Dee, vice chairman from 2004 to 2014; Joanna Y. Dee-Laurel, who was treasurer until 2014; and Raymond K.H. See, Alliance president and CEO.
Also charged were former Alliance management officials, including: George E. Sycip, Teresita S. Ladanga, Grace S. Dogillo, Arak Ratborihan, Marie Grace T. Vera Cruz, and Antonio C. Pacis.
The complaint alleges that Alliance officials “performed their individual acts in unison and cooperation with each other to complete all the elements of the crimes charges, thus constituting a whole collective effort to achieve their criminal objective.”
The complaining shareholders have accused Alliance officials of concealing the true nature of the company and its purposes at the time they invested. The shareholders said that the concealed purpose of the formation and operation of Alliance was to serve as little more than a payment vehicle for the benefit of the Dee companies and their associates. The complainants also allege that none of this was ever disclosed to them or the public or regulators.
“In actuality, Alliance was formed under the strictures of an Amended Rehabilitation Plan of four (4) related corporations, namely, FDPHI, Maranaw Canning Corporation (MCC), FDCP, lnc.(FDCP), Nautica Canning Corporation, and Clearwater Tuna Corporation (formerly known as Inglenook Foods Corporation), which were owned and/or controlled by the Dee family,” the complaint stated.
“While there is nothing illegal in the formation of a corporation due to rehabilitation proceedings, the formation of Alliance… was primarily with the sinister intention of inveigling funds from unknowing investors and the general public then siphoning them to pay off the creditors of the Dee Companies and to engage in illegal activities.”
“The intention to use Alliance to attract investors and the general public through misrepresentation and false pretenses was a scheme known to Alliance insiders,” the complaint stated.
The complaining shareholders cited instances of fund misappropriation, as well as irregularities in Alliance’s transactions relating to the company’s 6.4-hectare property in General Santos City and massive pre-payments to its so-called “fish supplier”, Buena Serte Jimenez Fishing & Trading, Inc. (BSJ).
The Singaporean investors estimated the company’s losses as a result of these misappropriations to approximately $18.2 million or over P855 million, and putting the complainants’ cumulative investments amounting to approximately $10 million in peril.
“As will be seen below, these are funds that can no longer be returned to Complainants, whether in the form of dividends or even through the sale of their shares in the stock market. Further, with the deliberate dilution of Complainants’ shareholdings in Alliance, their property rights were disturbed. With their previous shareholdings, complaints had two (2) seats on the Board of Directors which prevented a 2/3 majority. Complainants could also properly ensure proper checks and balances in Alliance and was a needed vote. However, with the dilution of Complainant’s shareholdings their seat on the Board of Directors was reduced to one (1) and their rights and advantages arising from their shareholdings were suddenly extinguished,” the complaint stated, adding that aside from the dilution of shares, Alliance shares have suffered drastic price declines and that dividends are impossible due to the huge losses that have been piling up over the last few years .
In the charge, the Singaporean investors further accused Alliance officials of falsifying public documents, particularly the Fish Supply Agreement signed between Alliance and BSJ dated January 25, 2010, and the Loan Agreement dated January 13, 2011 which allegedly allowed Alliance to misappropriate corporate funds for the 64-hectare General Santos City property.
Prior to this latest complaint, the group of Singaporean investors in Alliance had already initiated several lawsuits against company officials.
There have been at least three other criminal actions filed over the latters’ refusal to open the company’s books and records for inspection, these remain pending in the Department of Justice. In May 2014, Singaporean investors again filed a case against Alliance officials for arranging the entry of a new and unknown investor Strongoak, Inc. and issuing 28.69% of company’s shares without due notice and information to the complainant’s board representatives. Also in May 2014, the foreign shareholders leveled a derivative lawsuit against seven Alliance officials of grave mismanagement. These cases remain pending in court.
Alliance officials filed a case against two representatives of the Singaporean shareholders for allegedly exposing confidential information on transactions undertaken by the company. A libel complaints has also been filed by Alvin Dee against the representatives of the minority shareholders for allegedly exposing corporate secrets. Each of these charges were dismissed by government prosecutors and have been appealed to the Department of Justice, where they remain pending.