PriceSmart minority owners urge court to halt disbursement of company funds

William S. Go, PriceSmart Philippines (PSMT) chairman and representative of the minority stockholders of the warehouse shopping firm, appealed anew yesterday to the Pasig City Regional Trial Court (RTC) to stop the illegal disbursement of company funds by PriceSmart-appointed executives led by PSMT president Benjamin M. Woods.

In a memorandum submitted to the Court, Go and the minority shareholders warned that "the continuation of such illegal disbursements and wastage of company funds would surely result in PSMT’s death as a business concern."

Go and E-Class Corp., which have a combined 38 percent stake in PSMT, commissioned the auditing firm of Punongbayan & Araullo to go through the books of PSMT in 2003 in light of the alarming decline in PSMT’s finances, including a P350-million loss during that year alone.

The audit uncovered numerous unauthorized disbursement and siphoned PSMT funds, including more than P300 million in stewardship fees that were not covered by any agreement between PriceSmart and PSMT.

Woods, however, has repeatedly assured that if PSMT had financial problems, it would not have been able to reduce its debt.

PriceSmart, Woods reiterated, "is committed to stay in the Philippines and has no intention of closing in spite of its current corporate spat with a minority shareholder."

According to Woods, "we are here for the long-term."

While the Philippine operations of PriceSmart is still not profitable, Woods said, the company is still in its infancy and is prepared for losses.

Woods disclosed that in other locations of PriceSmart, the company allocates three to four years before expecting to post a profit.

PriceSmart’s Philippines operations, Woods pointed out, will be celebrating its fourth year this year.