Singaporean shareholders block new Alliance Select investor

SINGAPORE – The Singaporean shareholders of listed seafood processor Alliance Select Foods International, Inc are pursuing a preliminary injunction on the entry of a new investor into the company, as granted by a court.

In May, the Pasig City Regional Trial Court of Pasig City dismissed the petition of Singaporean investors led by Albert Hong Hin Kay and Hedy Yap-Chua to stop the enforcement of a board resolution allowing Strong Oak Inc to acquire 28.7% of the company through a P563-million (US$ 12.86 million) private placement.

The court, however, agreed to hear the petitioner’s application for a writ of preliminary injunction. Among the respondents in the petition are Alliance Select chairman George Sycip and chief executive officer Jonathan Y. Dee.

Hong and Chua have accused the controlling Filipino shareholders of railroading the approval of the entry of the new investor, whom they know very little about. They also claimed they were not properly consulted about it.

Call for transparency

Strong Oak’s entry into alliance would dilute the Singaporeans’ holdings to 24.52% from 34.4%.

Chua said they have never met representatives from the new investor and were only given an information pack on Strong Oak an hour before the board meeting on May 5, when the board resolution on Strong Oak’s investment was approved.

“The question is not the entry of the investor but the nature of the investor. Why is there no transparency? If this company wants to invest, why is this company not disclosing information?” said Chua in a briefing for visiting journalists, Thursday, June 12.

Hong and Chua also said they have been continuously denied access to the company’s books amid observations of poor performance.  

The Singaporean investors said that based on their independent financial review, as of December 2013, Alliance Select has current liabilities outpacing its current assets because of loans amounting to $33.175 million.

The company also needs to address its very high overhead costs, the Singaporean shareholders noted.

Hong said their group has been kept out of developments in the company especially regarding financial problems.

“We want this company to succeed. Whenever we ask questions, there are no answers. I had so many meetings with Jonathan (Dee). I tell him if you’re in trouble, we can help. We’ve been asking the same question from day one: ‘Please tell us your problem,’” said Hong.

Chua said they have also filed a derivative suit with prayer for the creation of an interim management committee which, if granted, would manage the company while the petition for an injunction is being heard.

The proposed interim committee would be composed of one representative each from the side of the petitioners, the court, and the management.

There is hope

Chua will be in Manila Friday, June 13, to attend hearings on the petitions.

The controlling officers and directors of the company, in turn, filed on Wednesday, June 11, criminal complaints against Chua and Hong before the Pasig City Regional Trial Court for allegedly revealing confidential corporate financial secrets.

This was announced in a regulatory filing to the local bourse but no further details were provided.

“We have not seen the case so we cannot comment on it,” said Chua.

Despite being locked in a corporate squabble with the company’s Filipino shareholders, they see growth potential in the firm, Chua said. “We invested in the potential of this project. We feel that if the management concerns can be addressed, there may still be hope,” she said.

Alliance Select produces over 200 metric tons of processed seafood daily, primarily canned tuna. The company supplies hundreds of brand-name companies across 60 companies worldwide.

Alliance Select export markets include Europe, North America, Asia, Africa, and South America.

It also processes tuna by-products and scraps into fishmeal for its domestic and overseas markets. It recently acquired a New Zealand-based company, Akaroa Salmon NZ, Ltd, to tap into the global smoked salmon market. – Rappler.com