One minor foreign company with interest in the disputed West Philippine Sea is starting to fight back to prevent a further erosion of its stake in the oil and gas prospect.
Minority shareholders of FEC Resources Inc., a unit of PXP Energy Corp., have started the process of filing a complaint with the Securities and Exchange Commissions of the US, Canada and the Philippines in a bid to obtain a higher valuation of the company’s 6.8-percent stake in Forum Energy Ltd., the company that controls a 70-percent interest in Service Contract 72 off northwest Palawan.
FEC’s economic interest in SC No. 72, also known as the Reed Bank offshore area that contains the Sampaguita gas discovery field, is hard to gauge, but minority shareholders of FEC feel that the valuation of their investments are tied to recent transactions and the highly prospective area of the Palawan field.
FEC shareholder Matt O’Malley, who represents most of the minority owners, is seeking a valuation close to the private placement completed by businessman Dennis Uy in PXP Energy.
O’Malley’s FEC lost 11.6 percent of its interest in Forum Energy (and SC 72 for that matter), “without notice, without a valuation methodology and without an opportunity to protect itself from dilution,” according to an FEC source.
The FEC minority shareholders were also perplexed over the way their interest in Forum Energy dropped to 6.8 percent from 18.4 percent through a debt for equity swap and a share sale.
“FEC Resources shareholders were told about the swap and sale after they occurred. There was no opportunity for FEC Resources shareholders to protect itself from dilution. No opportunity to retain our extremely valuable position in Forum Energy/SC-72/Reed Bank,” the source said.
Uy recently invested in PXP Energy through his Dennison Holdings Corp. His firm subscribed to 340 million shares at P11.85 per share or for a total of over P4 billion. FEC Resources believes the valuation of its economic interest in Forum Energy should approximate Uy’s subscription price as one way of protecting minority investors.
Envy of Sarangani
The Securities and Exchange Commission, meanwhile, has found itself mired in a “religious controversy” over an alleged investment scam. The regulatory body early this month decided to pry into the fund-raising activities of a Christian missionary group from Sarangani province.
The SEC acted on complaints that the Kapa Community Ministry International, led by charismatic pastor-preacher Joel Apolinario, may have been enticing the public to invest with promise of returns way beyond the current market rates.
Apolinario is a fundamentalist Bible-quoting type of evangelist who attracts common people in search of relevant spirituality. But he has apparently offended the leaders of more conservative church groups who see him as a “flock stealer.”
The pastor’s nemeses, it is believed, have joined forces to portray the religious leader as an investment scammer.
The alleged investment scheme, however, has turned out to be nothing more than an aggressive effort on the part of Apolinario’s church group to raise donations and contributions. Almost all church groups aggressively raise money through donations, contributions and even investments.
A recent article in social media cited the vast investments of the Roman Catholic Church in the Philippines. According to the Daily Sentry, several Catholic Bishops hold thousands of shares at blue-chip Ayala Corp. valued at millions of pesos.
The article noted that several ranking Catholic officials own shares at mining companies, especially those operating in Eastern Visayas. Citing data from the Philippine Stock Exchange, the article claimed that the Archbishops of Manila and Zamboanga own some 2.5 million shares at Philex Mining Corp. valued at over P200 million.
The Archbishop of Manila is also the fourth biggest shareholder at the Bank of the Philippine Islands with a stake valued at close to P18 billion.
Nobody questions the Catholic Church’s enormous wealth. It obviously needs money to run educational and charity programs and fund its mission.
The same can be said of Apolinario’s little Sarangani-based community Church. The pastor needs all the help he can get to preach the Gospel and help his brethren. But we doubt if the money he can raise from donations will be enough to buy even a fraction of the shares in blue-chip companies that Catholic Church officials hold.
Apolinario’s nemeses, instead, should debate with him in the pulpit, instead of using the SEC to silence the religious leader. The corporate watchdog has been put in an unfair position in this issue by those who cannot stomach a bible-quoting small-town preacher.
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