PSE suspends indefinitely trading of Meralco shares

Due to unresolved issues on its stock certificates, trading in Manila Electric Co. (Meralco) shares was suspended indefinitely starting yesterday by the Philippine Stock Exchange (PSE). 

“In light of the PDS (Philippine Depository System) letter, the Exchange is constrained to suspend the trading of Meralco shares effective Dec. 17, 2008, until further notice,” the PSE’s disclosure department head Pete Malabanan said. 

“These actions are taken to ensure the integrity of an audit trail that will allow both our institutions to trace the movement of these securities should any contamination occur…” he added. 

On Tuesday (Dec.16), the PSE halted trades in Meralco shares for an hour following a complaint by the state-run Land Bank of the Philippines on the cancellation of its stock certificates.

But in a separate statement yesterday, Meralco corporate secretary Emmanuel R. Sison stressed that the power utility merely complied with a legal order.

He reiterated that the issuance of new stock certificates in the name of Josefina S. Lubrica was pursuant to the demand to comply dated Nov. 3, 2008 covering the certificate of sheriff’s sale dated Oct. 24, 2005 issued by the Office of the Regional Adjudicator, Region 4, Department of Agrarian Reform and Adjudication Board (DARAB).

He said the order directed  to” immediately and without delay issue or cause the issuance of and/or transfer in the most expeditious and efficient manner the corresponding certificates evidencing the subject securities or ownership  or registration  in the name of the purchaser at sheriff’s auction, Josefina S. Lubrica.” 

The power utility firm said  this  was received on Nov. 4, 2008 and that the transferee has secured the corresponding Certificate Authorization Registration dated Nov. 20, 2008.

On the issue of  the trading suspension of the blue chip Meralco stocks, Sison said the issue involves only 42 million shares out of the 1.1 billion outstanding shares.

Sison added that  many shareholders are not in any way involved in the issue but are nevertheless greatly affected.

The Meralco official also asked the PSE to reconsider its decision to suspend the shares of the company at the bourse.

“We are, therefore, appealing to the Philippine Stock Exchange to lift the suspension of the trading of Meralco shares,” Sison said. 

Landbank questioned the decision of Meralco to cancel its  42 million stock certificates and putting it under the name of a certain Josefina S. Lubrica.

According to Landbank officials, Meralco’s move may cause “complications” especially with the sale of these shares (equivalent to about four percent of Meralco’s total shareholdings) to an investment group called Global  5000.

The Landbank shares in Meralco is part of the 10 percent  share owned by the government financial institutions that Global 5000 is trying to buy for P9.9 billion.   

Noel Marquez from Landbank’s legal department, said this issue may be a setback as this may  ”complicate” matters especially with the sale to Global 5000.

At present, the Landbank lawyer admitted that they are still in the process of exploring all options.