THE PRESIDENT of The Medical City (TMC) said pushing through with the company’s annual shareholders’ meeting would only undermine the interest of minority stockholders, as the Securities and Exchange Commission (SEC) has yet to determine whether previous share purchases orchestrated by one of its top officials were legal.
TMC President and Chief Executive Officer Alfredo R.A. Bengzon was referring to the Corporation and Shareholders’ Agreement (CSA) among TMC, Fountel, and Clermont groups arranged by TMC Director and Treasurer Jose Xavier B. Gonzales back in 2013.
In a phone interview with BusinessWorld, Mr. Bengzon said Mr. Gonzales and the Clermont group together made a number of acquisitions that allowed them to increase their stake in the firm to 54% from 40%, without the knowledge of minority shareholders.
He claimed that the CSA was not publicly disclosed to the board of directors at the time the agreement was made, making the deal questionable. This is also contrary to an earlier statement made by TMC Chairman Augusto P. Sarmiento, who said that the CSA was shown to the board.
“The CSA was never presented to the board…I have seen and reviewed the board minutes at the relevant time in 2013, and there is nothing to the effect being claimed by Mr. Sarmiento,” Mr. Bengzon said.
Mr. Bengzon has since filed a complaint with the SEC, asking the corporate regulator for an indefinite postponement of its ASM until such time that the issues are resolved.
“Any ASM held before this resolution will effectively legitimize and strengthen Eckie (Mr. Gonzales) and Clermont’s control over the board and management, which will be to the disadvantage of shareholders if this control is later proven to be acquired through illicit means,” Mr. Bengzon said.
“Under these circumstances, if you hold an ASM, my vote, and the collective votes of other stockholders, would have very little value, where Eckie and Clermont could outvote as all,” he added.
Mr. Bengzon made this appeal following Mr. Sarmiento’s statement last Tuesday, where he called on the SEC to allow them to push through with the ASM. Mr. Sarmiento claimed that Mr. Bengzon was using the postponement of the ASM to distract the company from the latter’s mismanagement of its operations in Guam.
Mr. Bengzon belied the chairman’s claims, noting that its current operation in Guam is better than the previous year, and is now on an “uphill trajectory.”
“That’s why, in the interest of good governance and the most prudent cause of action would be to allow the SEC to investigate,” he said. — Arra B. Francia