Romualdez family moves to block SM group’s control of Equitable PCI

Trans Middle East Equities, Inc (TMEQ) of the Romualdez family has sought a restraining order on the SM group as the battle for the control of Equitable PCI Bank continues. With the bank’s stockholders’ meeting scheduled tomorrow afternoon, TMEQ asked the Court of Appeals to prevent Equitable PCI’s biggest shareholder, the Henry Sy-owned SM group, from sitting on the bank’s board. Earlier, the government asked the Sandiganbayan to prevent the Romualdez family from exercising their right to vote TMEQ shares in Equitable PCI. TMEQ is involved in a legal battle involving the family’s alleged ill-gotten wealth. In a May 17 petition, TMEQ asked the appellate court to stop SM nominees Teresita T. Sy, Edmundo L. Tan, Josefina N. Tan, Exequiel P. Villacorta, Jr., Gregory L. Domingo, Jose T. Sio, Harley T. Sy, Rogelio R. Cabunag and Antonio A. Henson from being elected to the bank’s board. Ms. Sy, director and chairman of Equitable PCI’s executive committee, confirmed fellow director Ferdinand Martin Romualdez’s bid to have her disqualified. "They can do what they want but we are entitled [to sit on Equitable PCI’s board]," Ms. Sy told BusinessWorld. In a 20-page petition, TMEQ said the nominees of the SM group were not qualified as directors under the General Banking Act and the Securities Regulation Code. "They [SM nominees] are covered by the disqualification of BDO [Banco de Oro Universal Bank] for conflict of interest," TMEQ said. The SM group owns Banco de Oro. Aside from being competitors, Banco de Oro had offered to merge with Equitable PCI via a share swap of 1.6 Banco de Oro shares for every Equitable PCI share last Jan. 6. Mr. Romualdez, TMEQ’s board representative, is against the merger. Mr. Romualdez earlier lost bank chairmanship to Social Security System (SSS) President and Chief Executive Officer Corazon S. dela Paz amid merger discussions. TMEQ noted that before filing the petition, it had asked the Bangko Sentral ng Pilipinas (BSP) and Equitable PCI board to act on its disqualification plea. TMEQ said the central bank had not taken any action, while the bank board during its May 16 meeting had opted not to act on the matter. "BSP and respondent board of directors of Equitable PCI are guilty of dereliction of duty and grave abuse of discretion," TMEQ said. Corporate Secretary Sabino Acut, Jr. was also accused of being unfit to sit on the bank’s board given his connection with the SM group. TMEQ also asked the court to block the nomination of Jesus G. Tirona as an independent director. The Romualdez firm said Mr. Tirona’s former post as Banco de Oro president "would interfere with the exercise of independent judgment in carrying out the responsibilities of a director." The SM group owns more than 34% of Equitable PCI, while TMEQ owns 7.13%. Bank shares were last sold for P71 apiece, down from P72.