DOJ indicts Alliance execs for non-disclosure

MANILA, Philippines — The Department of Justice (DOJ) has indicted businessman George Sycip and four other executives of tuna canning firm Alliance Select Foods International Inc. (ASFII) for refusing to open their corporate records to shareholders.

Sycip, son of the late ambassador Washington Sycip and board chairman of ASFII, was charged with violations of the Corporation Code of the Philippines, along with the company’s board members Alvin Dee, Jonathan Dee and Ibarra Malonzo; and assistant corporate secretary Annsley Bangkas.

“After careful scrutiny of the facts and evidence on record, we find that probable cause exists to charge respondents with violation of Sections 74 and 75, in relation to Section 144 of the Corporation Code,” according to the eight-page resolution signed by Justice Undersecretary Deo Marco, which was released yesterday.

“The elements of the crime committed by the respondents are present in the instant case,” it added.

Section 74 of the Code provides: “The records of all business transactions of the corporation and the minutes of any meetings shall be open to inspection by any director, trustee, stockholder or member of the corporation…”

Section 75, on the other hand, states: “Within 10 days from receipt of a written request of any stockholder or member, the corporation shall furnish to him its most recent financial statement, which shall include a balance sheet as of the end of the last taxable year and a profit or loss statement for said taxable year, showing in reasonable detail its assets and liabilities and the result of its operations.”

The complaint was filed by ASFII’s foreign shareholders namely Harvest All Investment Ltd., Victory Fund Ltd. and Bondeast Private Ltd.

In issuing the resolution, the DOJ granted the petition for review of the complainants and overturned the previous resolutions of the Office of the Prosecutor General which dismissed the complaint against the younger Sycip and his co-respondents.

Records showed that the complainants, through their representative Hong Hin Kay, also a stockholder and board member, sought to inspect the books and records “due to the ‘substantial financial downturn’ suffered by ASFII which has adversely impacted its share price in the market.”

It was found, however, that the respondents “denied the said right to inspect by employing a scheme to repeatedly refer the issue between the board and certain lawyers.”

The DOJ held that the respondents should be held criminally liable for this, saying the complainants “are stockholders of ASFII and thus have the right to inspect the corporate books and records.”

“Respondents, consisting of members of the board and the assistant corporate secretary voted in favor of such actions and/or implement the same. The scheme notably amounted to a delay of at least 72 days and yet with opinions from lawyers, there is no resolution to allow the inspection,” the order said.

“This tactic, as shown by clear evidence, of continuously delaying any decision on the matter indicates an evasive scheme adopted by respondents to defeat the rights of complainants to inspect the corporate books and records of Alliance,” it added.

ASFFI is a publicly listed company currently embroiled in a management conflict following the acquisition of Strong Oak Inc. of 430.286 million shares worth P563.674 million. The sale has resulted in the dilution of the stake of the company’s foreign shareholders.