THE National Grid Corp. of the Philippines (NGCP) should sell to public investors its 20 percent shares or face tougher congressional scrutiny.
“The longer the delay in NGCP’s public share offering and listing at the local stock exchange, the more disadvantageous it will be for the company. They should go public as quickly as possible, if they want to avoid harder congressional scrutiny,” Deputy Speaker and Surigao del Sur Rep. Johnny Pimentel said.
“NGCP’s public share offering will also help allay fears of any undue foreign influence, because once it is actually listed, the company will be subject to more rigorous disclosure and periodic reportorial obligations,” Pimentel added.
According to Pimentel, there are concerns that the State Grid Corp. of China, which owns 40 percent of NGCP, might be in a position to remotely manipulate the Philippines’ power transmission system.
NGCP, which is 60 percent owned by Filipino investors, has already made assurances that adequate safeguards are in place to prevent external and unauthorized entities from gaining remote access to the country’s electricity network.
Republic Act 9511 – NGCP’s legislative franchise – was signed into law on Dec. 8, 2008 and compels the company to disperse ownership by offering at least 20 percent of its outstanding capital stock to public investors and listing its shares at the Philippine Stock Exchange (PSE) inside 10 years.
“NGCP and other grantees of legislative franchises are required to sell some of their shares to the public. This imposition by Congress actually springs from the 1987 Constitution. Thus, any non-compliance is not a small matter,” Pimentel said.
Pimentel cited Section 11, Article 12 of the Constitution, which mandates the State to “encourage equity participation in public utilities by the general public.”
Pimentel at the same time recognized that the Filipino investors who hold 60 percent of NGCP may already be taking the initial steps for the company’s backdoor listing at the PSE.
“We understand they are set to conduct a share swap with a PSE-listed entity that they also control,” Pimentel said.
Synergy Grid & Development Philippines Inc., a dormant PSE-listed firm, disclosed on Nov. 21 that it has agreed, subject to regulatory approvals, to enter into a share swap with One Taipan Holdings Inc. and Pacific21 Holdings Inc. – NGCP’s majority owners.
After the share swap, Synergy said it may conduct a public offering of newly issued shares to broaden ownership and comply with the minimum public ownership requirement.
Under the terms of NGCP’s franchise, Pimentel said the listing at the PSE of any company that directly or indirectly owns or controls at least 30 percent of NGCP’s outstanding shares “shall be considered full compliance of this listing requirement.’’