Pedro Roxas, the chair of Roxas and Co. Inc., justified the recent sale of significantly discounted shares to the wife of a director during the company’s annual meeting on Wednesday.
The board of RCI faced a throng of questions from stockholders seeking transparency over deals conducted by the century-old property holding company, which has become an acquisition target of businessman Leandro Leviste.
Among the questions raised pertained to the May 3, 2024, sale of almost 9 percent of the company at a 38 percent market discount to Gizela Madrigal Gonzalez-Montinola, the wife of then independent director and veteran banker Aurelio Montinola III.
Insider sale
Roxas, who belongs to the controlling shareholder group of RCI, argued that the selling price of P2 per share was at a premium considering its volume-weighted average price (VWAP) going back two months.
“At the time that the sale was agreed upon, the P2 per share was a 35 percent premium to the 30-day VWAP or volume-weighted average price, and also a 60 percent premium to the 60-day VWAP,” he said.
Montinola, who owns 0.02 percent of RCI, resigned from the board after his wife’s company, property developer Stonebridge Corp., was revealed to be the buyer.
He was elected as a regular board director during the company’s stockholders’ meeting on Wednesday.
Leviste, RCI’s third-largest stockholder with an 8.93 percent stake, was not among the nominees.
Judgment and discretion
Roxas elaborated on their decision to sell shares to Montinola’s wife.
“[The] board uses its judgment and discretion to decide who to sell the shares to and at the prices that are agreeable to the board. We always use our best judgment and we use data from the market prices for the sale of the treasury shares,” he said.
A source from the Philippine Stock Exchange stated that while perceived insider dealing might seem disadvantageous, it falls within the board’s prerogative.
“We can’t touch that, not even the Securities and Exchange Commission can touch that,” the official said. “That’s a judgment call by the board since they can argue Stonebridge is better for the company in the long term.”
Price surge
RCI, which controls vast landholding in Nasugbu in Batangas, has gained over 870 percent so far this year mainly due to the entry of Leviste.
Last May 17, Leviste announced his plan to purchase more shares at P3 each, causing RCI’s share price to rapidly spike above P4 each.
It is currently trading at P4.26 each, near its recent high of P4.58 per share.
Miguel R. Camus has been a reporter covering various domestic business topics since 2009.
