LAND BANK of the Philippines (LANDBANK) is moving closer to getting exemptive relief from the Securities and Exchange Commission (SEC) in line with its proposed acquisition of the Philippine Dealing System Holdings Corp. (PDSHC).
SEC Commissioner Ephyro Luis B. Amatong said they are currently reviewing LANDBANK’s application for exemptive relief which the state-run lender filed about two to three weeks ago.
“The application is under review, we already gave them a reply,” Mr. Amatong told reporters after the listing ceremony of Axelum Resources Corp. in Bonifacio Global City on Monday.
“We’re asking for clarity on the amendments to the fee structure, and then also they mentioned efforts to be more inclusive and fund agriculture, we want more detail on agricultural businesses (how they can) be more inclusive both to investors and to greater access to finance.”
LANDBANK needs to secure exemptive relief for the PDSHC acquisition since the Securities Regulation Code (SRC) states that no single group can own up to 20% of an exchange.
Item C of Section 33.2 of the SRC states that “no person may beneficially own or control, directly or indirectly, more than five percent (5%) of the voting rights of the Exchange and no industry or business group may beneficially own or control, directly or indirectly, more than twenty percent (20%) of the voting rights of the Exchange.”
However, the SRC also states that the commission may adopt rules, regulations, or issue an order defying the limit so long as “such ownership or control will not negatively impact on the exchange’s ability to effectively operate in the public interest.”
BusinessWorld sought Landbank’s comment on the matter but has yet to receive a reply as of press time.
Mr. Amatong did not answer when asked whether LANDBANK can get clearance within the year, but noted that discussions are “progressing.”
“Nagiging more focused na ’yung questions namin…Marami na silang substantive discussions sa application nila, kaya lumiliit ’yung requests namin for additional comments or clarity,” Mr. Amatong said.
LANDBANK said last July that it wants to acquire a 49% stake in PDSHC before the end of the year, already securing commitment from about 21% of shareholders at the time. It has set an offer price of P215 apiece for the shares.
The bank expressed its intention to increase its stake in PDSHC amid the Philippine Stock Exchange, Inc.’s (PSE) longstanding plan to merge the country’s capital markets. The PSE, however, has yet to bring down broker ownership to meet the single industry limit, consequently failing to secure exemptive relief for the PDSHC buyout.
Finance Secretary Carlos G. Dominguez, who also acts as LANDBANK’s chairman, earlier said that the delays in the PSE’s acquisition of PDSHC hampered the growth of the capital markets. — Arra B. Francia