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Thursday, October 09, 2008

SSS Cites Pre-emptive Right in Philex Shares

Social Security System called on a mining corporation, on which it owns substantial shares of stocks, to recognize its pre-emptive right on holdings that the company is selling to the public.

SSS President and Chief Executive Officer Romulo Neri said the institution has 23 percent shares in Philex Mining Corporation, and it aims to protect the interest of its members as provided under corporate laws.

“We exercise this pre-emptive right as matter of good governance,” Neri said. “Our action aims to protect the interest of SSS members and other Philex shareholders.”

The Hong Kong-listed First Pacific acquired a 20-percent stake in Philex Mining Corporation, according to news reports. The purchase makes the conglomerate one of the major shareholders in the company.

SSS owns 714.43 million Philex shares, which is equivalent to a 23.03 percent stake. The pension fund has two board seats in the corporation.

Neri said his actions were in accordance with the instructions from the Social Security Commission, which is SSS’ highest policy-making body and is mandated to ensure the protection of the value of the investments, which were taken from the contributions of its 27 million members.

“Our goal is not to stop the deal, but for SSS to be given the opportunity to exercise this pre-emptive right,” he said, adding that the exercise of this right is stipulated under Section 39 of the Corporation Code.

“We simply request that the procedures as mandated by law are followed,” he said.

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