Listed Liberty Flour Mills, the 67-year-old firm led by siblings William Carlos Uy and John Carlos Uy, were rocked by disclosures of governance lapses tied to past officers, exposing the company to “at least” P300 million in potential losses.
Details of the Aug. 27 meeting also revealed how these failures—coupled with significant amounts of uncollected receivables from related-party product distributor Parity Values—strained the company’s balance sheet.
This led to a series of property disposals, including the nearly P1-billion sale of the Liberty Building in Makati City to subsidiary LFM Properties Corp. in 2023.
Shares of Liberty Flour gained 1.8 percent on Tuesday to P24.45 each, valuing the firm at about P3.7 billion.
Internal investigation
During the meeting, company director and corporate secretary William Ang said several governance issues were being reviewed by the board, with one case already raised to their external counsel.
“Mr. Ang further disclosed that nine distinct issues, involving past officers of the company, had been raised over the course of the last four to five board meetings,” the minutes of the meeting showed.
“These matters are currently under review and one issue has been referred to external legal counsel for evaluation,” the minutes showed.
“Preliminary internal assessments suggest that the potential financial impact of these issues may amount to at least three hundred million Philippine pesos (P300 million),” it added.
Who’s involved?
Ang did not name the officials tied to the probe.
Changes in the past year involved company director Sandra Judy Uy, who stepped down as president in May 2024, and Stella Marie Jill Uy, the vice president for purchasing and assistant treasurer also until May last year.
Sandra Uy is the daughter of William Uy. Her uncle John Uy assumed the role of president in June last year. Stella Uy is not identified as a relative of the controlling Uy family.
Some of the questions raised during the Aug. 27 meeting were made by Stella Uy via a proxy, the minutes showed.
Some issues discussed
Ang said the governance concerns include the “alleged non-disclosure of zoning issues and the over-procurement of wheat.”
As noted in the minutes, he said this “ultimately led to the sale of the Liberty Building to the company’s subsidiary, LFM Properties Corporation.”
Based on Liberty Flour’s annual report, the building was sold for P980 million.
The sale is under legal review, with Ang inviting shareholder representatives to examine the deal alongside management and auditors, the minutes showed.
Conflict of interest
Much of the discussion centered on Liberty Flour Mills’ relationship with its chief distributor Parity Values Inc., which is a stockholder and also the chief distributor, accounting for 57 percent of its sales.
Shareholders specifically pressed Ang on significant receivables owed by Parity Values to Liberty Flour. This amounted to P804 million at the end of 2024.
Ang said Parity Values was the firm’s distributor since the 1970s and that these uncollected payments had accumulated over time.
He said a payment plan is in place to cut receivables owed by Parity Values by 40 percent next year.
Heated debate hints at family rift
The governance debate reached a flashpoint when Ang suggested past officers, including William Uy’s daughter, Sandra Uy, should pursue legal action against Parity Values.
“He stated that Ms. Sandra Uy and Ms. Stella Uy should pursue legal action against Parity Values should it be found that the entity failed to uphold principles of good governance, full disclosure and transparency, or if it had neglected its fiduciary duties,” the minutes showed.
Profit sharing for directors, officers
Later in the meeting, Ang was asked about the proposed 10 percent profit-sharing scheme for directors and officers.
He said it would apply only to flour milling income, projected at about P100 million in 2025. This means around P10 million to be shared.
Ang also said this practice dated back to the 1970s and was only now being formalized.
“In this regard, Mr. Ang cited the active participation of previous management, specifically Ms. Sandra Uy and Ms. Stella Uy, in the implementation of said arrangements,” the minutes showed.
“He recalled that during their respective tenures, the profit-sharing rate had been
established at approximately twelve percent (12 percent),” it added.
Financial performance
Liberty Flour Mills booked P1.23 billion in revenues in 2024, down from P1.54 billion a year earlier, as flour sales continued to soften, while profit surged to P144.9 million thanks to asset sales.
Ang also told shareholders the company expects to be debt-free by December 2025, supported by proceeds from the sale of its P1-billion Angono, Rizal property to real estate developer Haus Talk.
Miguel R. Camus has been a reporter covering various domestic business topics since 2009.
