SEC approves PSE request on independent director rule

The Securities and Exchange Commission (SEC) has approved the request of the Philippine Stock Exchange (PSE) lifting the prohibition on anyone who has been employed in any executive capacity by any listed company within the last two years, from sitting as an independent director in the bourse.

The PSE said such ground for the disqualification of independent directors is inconsistent with the Securities Regulation Code and its implementing rules.

Under Section 38 of the SRC, an independent director is defined as "a person other than an officer or employee of the corporation, its parent or subsidiaries, or any other individuals having a relationship with the corporation, which would interfere with the exercise of independent judgment in carrying out the responsibilities of a director."

"Given the clear language of Sec. 38 of the SRC, a candidate shall not qualify as an independent director only if said person is an officer or employee of the exchange or the Securities Clearing Corp. of the Philippines," said PSE corporate secretary Aissa V. Encarnacion.

Encarnacion said it would become unduly restrictive if the proposed clause is added as a criterion for disqualification as she pointed out that the exchange is the only venture for the listing and trading of securities of all corporations.

She said excluding all persons who are highly qualified in the business field would, in effect, limit the pool of candidates qualified to occupy the seat of independent director in the PSE board of directors.

A total of 21 brokers and non-brokers are vying for the 15 board seats of the PSE when its shareholders elect a new board in its annual meeting scheduled on April 21, 2007.

Ten brokers are scrambling for the seven slots allotted for broker-directors, led by veteran stockbrokers and perennial rivals Vivian Yuchengco and Roberto Coyiuto Jr.

Yuchengco heads First Resources Management & Securities while Coyiuto owns R. Coyiuto Securities.

Comprising Coyiuto’s slate are Harry Liu of Summit Securities, Joey Roxas of Eagle Securities and Ignacio Gimenez of IGC Securities.

Other nominees are Alejandro Yu of R.S. Lim Securities, William Ang of Astra Securities, Eddie Gobing of Lucky Securities, Eusebio Tanco of Venture Securities, and David Chua of Asia Pacific Capital Equities.

The remaining eight seats are reserved for non-broker directors as required by the Securities Regulation Code.

Nominees for independent directors are PSE chairman and former Supreme Court Associate Justice Jose Vitug, lawyer Cornelio Peralta who has been PSE director since 2004, and Jose Luis Javier, who has been an independent director of the bourse since 2005.

The non-broker director candidates, on the other hand, include PSE president Francis Lim, Former Trade and Industry Secretary Jose T. Pardo, Annabelle Chua representing issuer Philippine Long Distance Telephone Co., and Amor Iliscupidez for San Miguel Corp., Omelita Tiangco to represent the Government Service Insurance System, Roberto Atendido of the Investment Houses Association of the Philippines, Philippine Chamber of Commerce and Industry president Samie Lim, and Paul Joseph Garcia of the Fund Managers Association of the Philippines.