Family feud stalls PBCom stock meet

MANILA, Philippines - A long-standing row over state-owned Philippine Deposit Insurance Corp. (PDIC)’s influence on the Philippine Bank of Communications (PBCom) prevented the mid-sized bank from holding its annual stockholders’ meeting Tuesday. Hours before the supposed event, the bank, through corporate secretary Bernard B. Lopez, wrote the stock exchange, informing it of the meeting’s postponement. At least 20 of the bank’s minor stockholders were not advised and trooped to Hotel Intercontinental Manila in Makati City Tuesday to attend the meeting. In his letter to the stock exchange, Mr. Lopez said the bank’s two major shareholders — the Nubla and Chung families, who hold a combined stake of 58.26% in PBCom — had sought the shelving of the annual stockholders’ meeting. The Luy family, the other major owners with a 39.022% interest in the bank, had agreed to the Nubla-Chung group’s proposal, he said. The proposal of the Nubla-Chung bloc was contained in a letter dated June 16, signed by Ralph C. Nubla, Jr. and Carlos Bunsit G. Chung, both directors of the bank. Mr. Lopez did not disclose the letter’s content to the stock exchange but BusinessWorld gathered that the two warring groups — the Nublas and Chungs on one side and the Luys on the other — which have long been at odds over how to divest their holdings in PBCom, had failed to agree on procedures pertaining to the election of PDIC representatives to the bank’s board. Bank insiders said the Nublas and the Chungs called for the postponement of the meeting because "the three major stockholder groups... could not agree on how to install the four nominees of the PDIC to the board" as mandated by a financial assistance package the state deposit insurer extended to the bank in 2004. Under that deal with PDIC, the bank’s major shareholders needed to sell at least 67% of their stake in PBCom to a third party within five years. The Nubla-Chung bloc, however, clinched a deal with the Yap-led Philtrust Bank for the sale of their combined holdings in PBCom, leaving out the Luys in the dark. In last year’s stockholders’ meeting, PDIC managed to secure only two of its four entitled seats in the PBCom board after it was caught in a power play between the warring groups. Observers at that time claimed the Nubla-Chung group used their shares to accommodate representatives of newspaper magnate Emilio Yap in the 15-man PBCom board. The PDIC has four nominees for this year’s board elections, but the Nubla-Chung faction has questioned their eligibility, noting the four do not own shares in the bank as of May 12. In separate letter in response to the Nublas and Chungs, a copy of which was obtained by BusinessWorld, the Luy family said it had agreed to defer the annual stockmeet "considering there will be no quorum with the absence of the Nubla and Chung groups." "We... are constrained to agree to the indefinite postponement... until the pending issues raised by the Nubla and Chung Groups and others are finally resolved," read the letter signed by PBCom chairman Enrique T. Luy and his family. "We hasten to add that we take issue with some allegations and innuendos contained in the aforementioned letter," it added. The Luy bloc insisted that the election procedures used last year still apply, which allowed it to elect two PDIC nominees to the bank board.