The bank is the subject of a battle for control by its major shareholders – EPCI Bank’s founding Go family on one side and state pension funds Government Service Insurance System and Social Security System and the Romualdez family’s Trans-Middle East Philippine Equities Inc., on the other.
The rift between the Go family and the other shareholders turned for the worse at the bank’s shareholders’ meeting last month after the GSIS-SSS led group walked out of the meeting to convene a separate meeting where they elected their slate of directors. On the other hand, the Go family and their allies pushed through with the original meeting to elect their own 15-person board of directors.
"Since there are now two sets of board of directors for the bank and in order to obviate confusion to the investing public, the exchange shall in the meantime recognize the bank’s president and chief executive officer Rene Buenaventura who was elected by both boards, as the bank’s duly authorized representative insofar as the bank’s relationship with the exchange is concerned," PSE president Francis Lim said in a letter to EPCI Bank with copy furnished to the bank’s opposing counsels.
Lim said the PSE shall honor disclosure submissions and other correspondences from the bank only when submitted under the signature of Buenaventura.
The GSIS-SSS group and TMEQ claim to have a controlling 54-percent stake in EPCI Bank. The Go family, on the other hand, reportedly has 25 percent in the country’s third largest lender.
The warring shareholders of EPCI Bank are now working towards an amicable settlement of their differences to appease jittery depositors of the bank.
They earlier issued a joint statement assuring the public that the bank is operating as usual and is ready to address the banking requirements of its customers with the efficient service it has been known for.
Concerned over EPCI Bank’s future, Bangko Sentral ng Pilipinas Governor Amando Tetangco Jr. met with the bank’s key shareholders to discuss ways to address the boardroom impasse, which if not resolved soon could further undermine investor confidence.
Tetangco, however, assured that the BSP stands ready to protect the interest of the depositors and other stakeholders in EPCI Bank. He expressed confidence that the intra-corporate dispute would be resolved soon.
International rating agency Fitch Ratings has expressed concern that a protracted legal dispute between EPCI Bank’s shareholders would adversely affect the operations of the bank and its ratings.
"EPCI Bank’s ratings may well come under pressure if the dispute is not quickly resolved. If it drags on, not only will senior management be distracted from developing and implementing strategy and staff-morale dampened, but depositors may become nervous," said Peter Tebbutt, senior director in Fitch’s Financial Institutions team in Asia.
The Go family’s Equitable Banking Corp. merged with Philippine Commercial International Bank (PCI Bank) in September 1999, in a deal supported financially by the SSS and GSIS.