5 Alliance execs face raps over refusal to disclose firm records

FILE PHOTO: The Department of Justice (DOJ) (Photo By Department of Justice (Philippines) – Official Site of the DOJ, Public Domain)

MANILA — The Department of Justice (DOJ) filed charges against five officials of tuna processing firm Alliance Select Foods International Inc. for refusing to open their records to shareholders.

In an eight-page resolution dated Dec. 4 but was released to media on Wednesday, the DOJ charged the firm’s executives namely, board of directors chairman George Sycip; assistant corporate secretary Annsley Bangkas; and members of the board of directors Alvin Dee, Jonathan Dee, and Ibarra Malonzo with violation of Sections 74 and 75, in relation to Section 144 of the Corporation Code of the Philippines.

“After careful scrutiny of the facts and evidence on record, we find that probable cause exists to charge respondents with violation of Sections 74 and 75, in relation to Section 144 of the Corporation Code,” read the resolution signed by Justice Undersecretary Deo Marco.

“The elements of the crime committed by the respondents are present in the instant case,” it added.

Section 74 of the Code provides: “The records of all business transactions of the corporation and the minutes of any meetings shall be open to inspection by any director, trustee, stockholder or member of the corporation.”

While Section 75 of the same law states: “Within 10 days from receipt of a written request of any stockholder or member, the corporation shall furnish to him its most recent financial statement, which shall include a balance sheet as of the end of the last taxable year and a profit or loss statement for said taxable year, showing in reasonable detail its assets and liabilities and the result of its operations.”

The resolution, which granted the petition for review of the complainants, overturned the previous resolutions of the Office of the Prosecutor General that dismissed the complaint against the younger Sycip and his co-respondents.

Acting on a petition for review filed by the complainants, the DOJ has found probable cause to indict the respondents for the violation of the Corporation Code.

Marco noted the complainants, through their representative Dr. Hong Hin Kay, who is also a stockholder and board member, sought to inspect the books and records “due to the ‘substantial financial downturn’ suffered by Alliance, which has adversely impacted its share price in the market.”

“Complainants are stockholders of Alliance and thus have the right to inspect the corporate books and records,” said Marco.

However, Marco said the respondents “denied the said right to inspect by employing a scheme to repeatedly refer the issue between the Board and certain lawyers“.

“Respondents, consisting of members of the Board and the Assistant Corporate Secretary voted in favor of such actions and/or implement the same. The scheme notably amounted to a delay of at least 72 days and yet with opinions from lawyers, there is no resolution to allow the inspection,” read the resolution.

“This tactic, as shown by clear evidence, of continuously delaying any decision on the matter indicates an evasive scheme adopted by respondents to defeat the rights of complainants to inspect the corporate books and records of Alliance,” the resolution stated.

Alliance is a publicly listed company currently embroiled in a management conflict following the acquisition of Strong Oak Inc. of the firm’s 430.286 million shares worth PHP563.674 million.

The sale has resulted in the dilution of the stake of the company’s foreign shareholders.

The case was filed by Alliance’s foreign shareholders, namely Harvest All Investment Ltd., Victory Fund Ltd. and Bondeast Private Limited.

The complaints, initially filed before the Pasig City Prosecutor’s Office, stemmed from the alleged denial of the respondents of the complainants’ right to inspect the corporate books and records. (PNA)