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THE page
allotted by the Philippine Stock Exchange (PSE) in its
web site to Cosmos Bottling Corp. contains the
information, which the public investors should know. But
in some filings, it seems it is company—not the
regulators through the rules they promulgate —which
decides when the public should know so vital information
as a listed company’s financial performance. Consider
the two latest filings, which were posted on the PSE web
site on the same date: January 10, 2008. One is the list
of Cosmos’s top 100 stockholders as of December 31,
2007, which was filed within the required period. The
other is the annual report for fiscal year 2006, which
is too late for investors to appreciate.
Incidentally, SGV’s audit reports of Cosmos’s financial
performance for 2006 and 2005, which were signed by
Jaime F. del Rosario as the SGV auditor in charge, were
also dated on the same date: October 8, 2007. But it
appears from the filings that the 2006 report arrived at
the PSE on January 10, 2008, much later than the 2005
report which arrived on November 29, 2007. Of course,
the delay is understandable. Why should the two reports
be filed on the same date when one should have been
filed a year ahead of the other? There is no need to
compute the number of days or months of delay in the
submission of a very important disclosure, which
influences the price of a listed stock. It is very
obvious that the filings were very late.
It is
now up to the chairman and commissioners of the
Securities and Exchange Commission and lawyer Francis Ed
Lim, PSE president and CEO, to tell the public which
rules were violated by Cosmos and how the violations
were committed. After all, any justification or
reasoning should not end among the files on their desks
or their cabinets and stored for posterity but should
also reach the market. If the explanation should come
directly from the Cosmos’s management, the Atlanta-based
The Coca-Cola Co, which has already taken over the local
soft-drink bottler from San Miguel Corp. through unit
South East Asia Holdings Inc. on
February 3, 2007,
may want to disclose where and how the violations
occurred. Was it in their watch or when Cosmos was still
under previous management? Who got penalized by whom?
How much was the amount of fines imposed on Cosmos for
violations of the disclosure rules?
****
With the
Americans now in control of Cosmos, what can the small
stockholders of the company, often described in the past
as the second-biggest cola bottler in the Philippines,
expect from them? This is a question that begs for an
answer in the face of Cosmos’s losing financial
performance in the first nine months of 2007. The loss
amounting to P786.299 million as of the end of the third
quarter last year may be puzzling but it should not be.
In the first place, Cosmos has been paying retirement
benefits to employees who lost their jobs in the last
two or three years as a result of retrenchment. Add to
the company’s operating costs the huge amount of
P629.493-million provisions for retirement and you will
find a company spending P1,434,667,000 on “general and
administrative expenses” from January to September
2007.
Cosmos
incurred the P786.299-million loss in the three quarters
in 2007, despite gross profit of P1,635,459,000 on net
sales of P7,785,973,000. Cosmos reported net income of
P165.353 million in the first nine months of 2006. Its
retained earnings, from which dividends are taken,
dropped to P1,718,587,000 as of September 30, 2007.
****
Cosmos
had no filings, which should identify the individuals
who received Cosmos’s retirement package in 2007. But
the public, particularly the small stockholders of
Cosmos, may be curious enough to know what the former
Cosmos’s top managers missed when San Miguel Corp. sold
its holdings in Coca-Cola Bottlers Philippines Inc. to a
unit of Coca-Cola group. PSE web site shows Cosmos’s
executive pay and perks of the company in the last three
years ending 2007. It paid its top six officers P19.30
million—salary, P13.40 million, bonus, P3.9 million,
others, P2.0 million—in 2005; P20.9 —salary, P14.40
million, bonus, P1.7 million, others, P4.80 million—in
2006; and (estimated) P24.30 million— salary, P14.80
million, bonus, P4.20 million, others, P5.30 million— in
2007. The executives who got these pay and perks may be
luckier than Cosmos’s stockholders who got nothing in
dividends. Probably, Cosmos is reserving its surplus for
future expansions after closing some bottling plants.
****
The
shares of Cosmos, which were last traded on May 23,
2006, when it closed at P3 were listed on the PSE on
December 13, 1994. Philippine Bottler Inc., now owned by
Coca-Cola group of
Atlanta,
owns 887,408,517 shares, equivalent to 98.2123 percent.
PCD Nominee Corp. holds 2,915,496 shares, or 0.3227
percent, for foreigners.
From the
Concepcion-controlled RFM Corp., Cosmos has ended up a
subsidiary of The Coca-Cola Co. after buying out San
Miguel. The change of control from Filipinos to
foreigners has placed the small stockholders in a
predicament that must have left them guessing what’s in
store for them. Will Cosmos remain a listed company?
Will Coca-Cola take it private again?
Whatever
will be the next corporate development that takes place
inside Cosmos’s boardroom, will these include a possible
tender offer for the remaining shares Coca-Cola does not
own yet?
Finally,
is there any tender offer in the offing for Cosmos
shares?
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