It is ironic that the article in Sunday Money of July 7 entitled 'Reality checklist helps players hear over company clamour' appeared directly below another entitled 'Integrity must guide corporate leadership'. The author of the 'reality' article, Michael Geczi of Edelman Public Relations, must have been unaware of the 'integrity' article when he wrote his piece.
As your readers may not be aware, Mr Geczi and his firm are actively engaged in advising First Pacific Corp in its attempt to sell its shares in Philippine Long Distance (PLDT) to a Manila-based competitor of PLDT. To use your pages to disparage the position of PLDT on this proposed transaction without declaring his interest is unethical. Your readers have a right to full disclosure.
While I do not agree with Mr Geczi that this is a straightforward corporate transaction, I do agree with one of the items on his checklist in the article, 'Agreeing to a deal is one thing: announcing one is still another. More important is the two-part question: can the deal actually close, and what are the barriers?'. As Mr Geczi is well aware, the deal proposed by First Pacific has to overcome a number of hurdles including rights of first refusal by other parties, the need for consent by a number of indirect shareholders and potential violation of government anti-trust laws as well as a PLDT by-law which prohibits competitors from serving on the PLDT board of directors.
As Mr Geczi states, 'corporate deals, by definition, are designed and executed to benefit shareholders'. Unfortunately, the deal proposed by his client benefits only First Pacific. Your readers may not be aware that First Pacific directly owns less than 10 per cent of PLDT shares. Under the proposed transaction the remaining shareholders get nothing and their holdings have been negatively impacted by a share price hurt by the volatility generated by First Pacific's actions.
Legal action taken by our firm in the United States has been successful in getting First Pacific to file with the US Securities and Exchange Commission the Memorandum of Agreement it signed with our competitor. Only now are the market and regulators able to create their own 'reality checklist' on the proposed transaction. Once that list is evaluated, it will be clear that this is a deal that is far from closing.
My interest in this is clearly stated through my affiliation below.
