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The trades of San Miguel and its units' shares account for a chunk of the transactions in the exchange.
MANILA, Philippines – Diversifying conglomerate San Miguel Corp. said all its units listed in the Philippine Stock Exchange will comply with the minimum 10% public ownership rule, a thorny issue among regulators, the tax agency and trading participants in the past years.
San Miguel confirmed to the exchange reports that it plans to “raise the public float of its operating subsidiaries to comply with the minimum requirement of the local bourse” vis-a-vis targets of a double-digit growth in earnings and revenues in 2012.
The Bureau of Internal Revenue had threatened to tax transactions of listed firms that public investors have less than 10% ownership of. The bureau, acting on the reform agenda of the Aquino government, had said allowing the status quo defeats the purpose of granting tax incentives on the trades of companies that remain in the hands of a few.
The trades of San Miguel and its units’ shares account for a chunk of the transactions in the exchange.
When San Miguel Corp., the parent firm, was diversifying its business and going through changes in its ownership structure, it fell below the public ownership cap. It has since complied with the minimum requirement when it sold $970 million worth of shares and convertible debt in early 2011.
The following members of the San Miguel group remain non-compliant:
Petron Corp – only 7.5% publicly held
San Miguel Brewery Inc. – 0.6%
San Miguel Purefoods Co. Inc. 0.1%
San Miguel Properties Inc. – 0.1%.
“All of those companies will comply,” San Miguel president Ramon Ang told reporters without providing additional details.
The Philippine Stock Exchange had said it will suspend trading of firms not meeting the rule starting 2013. Pushing that deadline earlier than the previous guideline of a three-year warning was its compromise with the tax bureau.
As of November 2011, there were 41 companies that still had public ownership levels below the minimum requirement.
These include Metro Pacific Tollways Corp., Filinvest Development Corp., PAL Holdings Inc. and state-run PNOC Exploration Corp. – Rappler.com