Coyiuto group walks out in PSE board row

Fireworks erupted again yesterday at the boardroom of the Philippine Stock Exchange (PSE) as the group of directors led by veteran stockbroker Robert Coyiuto Jr. walked out from a heated argument that involved the appointment of a practising stockbroker in the powerful Nominations and Elections Committee (Nomelec).

In a four-page letter to the PSE board, Coyiuto and four other directors asked for the recall and revocation of the appointment of Securities Specialists Inc. corporate nominee Francisco Villaroman as PSE corporate secretary and Nomelec chairman, citing a blatant violation of the provisions of the Securities Regulation Code.

The Coyiuto group, considered as the opposition bloc in the 15-man PSE board, includes two former PSE chairmen, Coyiuto and Harry Liu, along with fellow brokers Eddie Gobing, Edwin Luy and Federico Lim.

A source privy to the board meeting said the board did not arrive at a concensus on the matter as some of the directors "were neither here nor there," prompting the walkout by the group. "I think it has reached a point where the Coyiuto group now plans to file a criminal case against the board," the source added.

If it pushes through, it will be the third time that the Coyiuto faction and the other PSE directors led by chairperson Vivian Yuchengco and president Ernest Leung will be battling each other in court, following two prior attempts: First, contesting the results of the March 2002 elections and later, the PSE’s decision on the private placement of Itogon-Suyoc Mining shares.

This time, the group will be zeroing in on Villaroman’s qualifications for his twin designations since the SRC expressly prohibits any active member-broker of the PSE to sit on the Exchange’s management, unless detached for at least two years prior to such appointment.

Coyiuto’s group particularly pointed to Villaroman’s appointment as Nomelec chairman, a position which they claimed he can never be expected to be independent or non-partisan, "as it goes without saying that he owes his loyalty to the appointing authority rather than to the Exchange."

The Nomelec came under fire last year when it refused to prequalify former PSE president Ramon Garcia, Leung’s immediate predecessor, to run as an independent director, ironically using the SRC prohibition as the excuse. Garcia took the case to court and was supported by Coyiuto but lost the case for lack of merit.

Garcia was then a practising broker when he was appointed and elected PSE president in May 2000, after his predecessor Jose Luis Yulo completed his term following the tumultous BW Resources price scam.

Garcia, however, was able to skip through the SRC provision since the said law was not yet in effect, having been enacted only in August of the same year.