PSE issues show-cause letter to San Miguel

The Philippine Stock Exchange (PSE) has issued a show-cause letter to San Miguel Corp. directing the food and drink conglomerate to explain why it should not be penalized for a possible violation of disclosure rules when it denied the bourse’s request to submit a copy of the option agreement it entered into with Ashmore unit SEA Refinery Holdings B.V. regarding the acquisition of a majority stake in Petron Corp.

At the same time, the Securities and Exchange Commission directed San Miguel to submit the same, saying the company is bound by the securities law to disclose material, non public information. 

San Miguel, which invoked the Civil Code’s provision about confidentiality obligation in snubbing the PSE’s request, said it already received the show-cause letter and is studying its next move. 

“We have required San Miguel to furnish us with the agreement. These are material information which we can require to be furnished. There are disclosure obligations under the law that have to be complied with,” said SEC Commissioner Juanita Cueto. 

Another SEC official said the Corporation & Finance Department’s first letter to San Miguel, requesting for a copy of the option agreement, likewise got a lukewarm reception from the company as the latter insisted it was bound by law to keep private information confidential. “We will write again to San Miguel and reiterate our directive,” the same official said.

“Even if confidential, it should still be submitted to us because listed companies are required to disclose any information that could have a material impact on the stock price,” the same SEC official said.

Cueto, for her part, said San Miguel should submit the documents because the SEC can keep confidentiality if requested.

In an earlier letter to the PSE, San Miguel corporate information officer Ferdinand K. Constantino said the disclosure of a private agreement would cause the food and beverage giant to breach its contractual obligations with SEA Refinery.

He cited Article 1314 of the Civil Code which states that “any third person who induces another to violate his contract shall be liable for damages to the other contracting party.”