Conglomerate San Miguel Corp. describes as “excessive and unreasonable” the P769.3-million fine slapped by the Securities and Exchange Commission against the company for the late filing of additional documents pertaining to the acquisition of shares in Manila Electric Company in 2012.
San Miguel president and chief operating officer Ramon Ang said in a statement the company would contest in court the decision of the corporate regulator, saying there was no late disclosure technically considering the relevant information regarding the deal was provided and disclosed to the SEC and the Philippine Stock Exchange through the submission of SEC form 17-C.
“As such, the public was adequately and properly informed of the details of the share sale transaction inclusive of the purchase price, number of shares, equivalent percentage shareholdings in Meralco [27 percent] and the terms of payment,” Ang said.
“The penalty is highly disproportionate to the infraction attributed to the company considering that the disclosures made by SMC to both SEC and PSE were extensive enough to prevent market speculation and other similar fraudulent acts,” he asaid.
The SEC in a decision dated Nov. 21 slapped San Miguel with P769.3-million fine for late filing of reports regarding three transactions, reportedly in violation of Rule 23 of the Securities Regulation Code.
The first was when SMC acquired the Meralco shares from state-run Government Service Insurance System on Aug. 5, 2011; the second, when SMC sold a portion of the said shares to subsidiary San Miguel Purefoods Company Inc. on Aug. 24, 2011 and; lastly, the supposed indirect acquisition of SMC of what it sold to SMPFC on even date, since 91.67 percent of SMPFC was owned by SMC.
SEC Rule 23 requires directors, officers and principal stockholders of listed firms to file initial statement of beneficial ownership of securities within 10 days and to file statement of changes in beneficial ownership within 10 days after the close of each calendar month, if there is change in beneficial ownership.
San Miguel explained that the late filing was due to “inadvertence”.
The SEC said San Miguel’s excuse for the late filing of the said reports had no merit.
“Excuses such as inadvertence is self serving and unverifiable. If such excuses are allowed, then the reportorial requirements designed to ensure transparency and fairness in the securities market would be undermined,” the SEC said.
Ang said it appeared that the SEC, in spite of the full disclosures made, had imposed a sanction for the late filing of SEC Forms 23-A and 23-B which merely reiterated the information previously submitted.
“Good governance is an integral part of how we do business and we are committed to operating with the highest standards of ethical behavior. With the SEC’s decision, we will be constrained to seek relief from the court. Hopefully, the court will understand and appreciate the position of the company,” Ang said.