PSE elects new board amid SEC row

MANILA, Philippines - The Philippine Stock Exchange (PSE) elected yesterday its new 15-man board of directors despite a Securities and Exchange Commission (SEC) order limiting the extent of brokers’ voting rights.

The new board members, majority of whom are holdovers from the previous board, consist of seven stockbrokers and eight non-stockbrokers.

The stockbrokers are led by former PSE chairman Ma. Vivian Yuchengco and Francis Chua, representing the top 70 percent of brokers, and Eusebio Tanco, representing the remaining 30 percent.

The other broker-directors are Ismael Cruz, Eddie Gobing, Alejandro Yu and newcomer David Chua.

The non-broker directors, on the other hand, include representatives for investors, issuers and other market participants, as well as independent directors.

Re-elected to the board are Omelita J. Tiangco and Estrella C. Elamparo representing other market participants and investors, respectively. Amor C. Iliscupidez (non-broker director - investor) and Anastacio R. Martirez (non-broker director - issuer), both newcomers, round up these non-broker positions.

The bourse also re-elected Hans Sicat, an independet director, to a second term as chairman. The other independent directors are Cornelio Peralta, Jose Luis Javier and Vicente Panlilio.

The PSE has yet to appoint a new president to replace Francis Lim, who resigned from his post early this year.

Earlier, the SEC stood pat on its decision to limit brokers’ voting rights to 20 percent despite an injunction issued by the Pasig Regional Trial Court.

The SEC received Thursday an order from the Pasig RTC allowing broker shareholders to vote to “the extent of their actual shares” during the PSE’s board elections.

The RTC ruling was in response to the petition filed by stockbrokers, through the Philippine Association of Securities Brokers and Dealers Inc., for a temporary restraining order to prevent the exchange from implementing the revised 2010 Nomelec rules.    

In particular, the PASBDI sought injunction against the SEC order requiring the PSE to limit starting this year, and every year thereafter, the voting rights of brokers to 20 percent in accordance with the Securities Regulation Code.

Under the new Nomelec rules, the number of brokers elected should correspond to 20 percent of brokers’ ownership limit “provided that non-brokers may elect additional brokers to the board as long as the total number of brokers would not exceed 49 percent of the board seats.”

This means only three brokers may be elected to the board while four board seats would be reserved for either broker directors or non-broker directors. Eight seats would be reserved for non-broker directors, consisting of one president, three independent directors and four directors who will represent issuers, investors and other market participants.

Records show that around 38 percent of the PSE’s outstanding shares, are still held by brokers.

The Securities Regulation Code states that brokers as well as any industry group may own only a maximum of the 20 percent of the PSE.

However, since the brokers refused to comply with this ownership rule, the SEC has decided to just limit their voting power to 20 percent even though they own voting common shares amounting to more than 20 percent.