US court orders First Pacific to explain non-submission of MOA

The United States District Court Southern District of New York has asked the First Pacific Group to explain why it should not be required by the court to submit a copy of its memorandum of agreement (MOA) with the Gokongwei group, which up to now remains confidential.

Plaintiff Philippine Long Distance Telephone Co., which is 24.4 percent owned by First Pacific, is listed not only in the Philippine Stock Exchange but also the New York Stock Exchange and the Pacific Exchange. Its management and board of directors are opposing the proposed sale by First Pacific of part of its stake in PLDT to the Gokongwei group, the details of which are contained in the MOA.

In an order issued on July 10 a copy of which was personally served on First Pacific general counsel Ronald Brown yesterday noon, the court ordered the defendants, to show cause why an injunction should not be issued requiring them to make immediate corrective disclosure concerning their June 11 amended Schedule 13 D submitted to the US Securities and Exchange Commission by filing as an exhibit the MOA with the Gokongwei group.

Defendants include First Pacific Co. Ltd., Holland Pacific NV, Intalink BV, Larouge BV, Metro Pacific Holdings Inc., Metro Pacific Resources Inc. and Metro Pacific Assets Holdings Inc. all of which are under the First Pacific Group.

The US court gave First Pacific until noon of July 22 to explain why a copy of the MOA was purposedly not made part of the disclosure to the US SEC, in lieu of which a press release containing some portions of the agreement was submitted together with the Schedule 13D.

The court order is in answer to an application filed by PLDT to immediately order First Pacific to file its MOA with the Gokongwei group with the SEC.

The local telecommunications company’s move follows PLDT’s filing of a suit in the same court last July 3 against First Pacific for failue to comply with certain disclosure requirements under US securities law.

This second filing seeks to accelerate the process of judicial review in order to ensure that all shareholders will not be deprived of important information concerning the parties who seek to control PLDT, how that control will be exercised, other material terms of the MOA, and the arrangements the MOA apparently embodies,’ notes the application.

"We are requesting the court to immediately require First Pacific to submit a copy of the MOA in compliance with the US Securities Exchange Act of 1934. We are doing this to speed up the resolution of this issue, in the hope that we can resolve this matter as quickly as possible and protect the interests of all shareholders who are entitled to full disclosure of the MOA," according to PLDT vice president and spokesperson Butch Jimenez.

PLDT’s application noted that First Pacific failed to comply with US federal securities law, because it filed an amended Schedule 13D that omitted to include a copy of the MOA, which seeks to transfer control of PLDT to the Gokongwei group.

Instead, First Pacific merely attached a press release that selectively disclosed some, but not all the terms of the MOA, thus violating the requirements, purpose and intent of Section 13d of the US Securities Exchange Act of 1934.