Singaporean shareholders say Alliance Select new board ‘marginalize’ them

MANILA, Philippines – The plot thickens, as Singaporean shareholders of listed seafood processor Alliance Select Foods International, Inc alleged Thursday, June 19 that they have been “marginalized” by the new board because of the legal actions they have taken against the majority bloc.

The board includes new investor Strong Oak, Inc, whose entry in Alliance Select is being questioned in court by the Singaporeans.

Alliance Select shareholders approved on June 16 the P563-million ($12.87-million) private placement of Strong Oak which had been challenged in court by Singaporean investors Hedy Yap-Chua and Albert Hong Hin-Kay.

Alliance Select would issue 430.29 million new shares to Strong Oak at P1.31 ($0.03) per share, which would make up 28.7% of the company’s total issued capital of 1.5 billion shares.

As a result of Strong Oak’s entry into Alliance, Hong had been pushed off the board though Chua had been retained.

The Singaporeans, however, claimed that Chua had been removed from the executive and audit committees and retained only in the nomination committee “that meets once a year to consider candidates for the next shareholder meeting.”

They also alleged that Chua “was pushed off all her seats on the boards of Alliance’s subsidiaries.”

The Singaporeans also detailed Strong Oak only paid 10% of its entire subscription to Alliance Select’s shares, while Alliance Select allowed Strong Oak voting power over 100% of its subscribed shares, including the 90% that it has not yet paid Alliance Select for.  

“None of the Alliance Select shareholders have had such a privilege, all of the minority shareholder have fully paid for their shares.  But not their newest favorite shareholder, Strong Oak,” the Singaporeans said in a statement shared June 19.

Chua and Hong are pursuing cases against the majority shareholders of Alliance Select to stop the entry of Strong Oak, which they said they know very little about.

The plot thickens

In May, the Pasig City Regional Trial Court of Pasig City dismissed the petition of the Singaporean investors to stop the enforcement of a board resolution allowing Strong Oak to acquire 28.7% of the company through a P563-million ($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, claiming they were not properly consulted about it. They 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 earlier said their group has been kept out of developments in the company especially regarding financial problems.

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

On June 16, the majority bloc filed a Motion to Intervene in the injunction case filed by the Singaporeans. In its Answer-in-Intervention, Alliance Select stated its board resolutions are valid and defended its decision to accept Strong Oak’s investment offer of P563 million ($12.87 million).

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

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