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Business

Filinvest explains side to SEC

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Filinvest Development Corp. (FDC) president L. Josephine Gotianun Yap announced yesterday the submission of FDC’s reply to the letter of Director Tomas C. Syquia of the Compliance and Enforcement Department of the Securities and Exchange Commission (SEC) asking FDC to explain allegations of insider trading involving Filinvest Land Inc. (FLI) shares.

"We are thankful the SEC has given us an opportunity to provide important relevant information on the events that transpired. With a complete picture and a more thorough understanding of the objectives of the company in selling FLI shares, the SEC will have a better basis in making its decision and realize that there was no insider trading involved," Yap stated.

In Filinvest’s reply, through lawyer Estelito P. Mendoza, it was emphasized that the sale of FLI shares was in the exercise of corporate authority and in discharge of its corporate responsibility to maintain the financial stability of FLI and to protect shareholder value. The sale was intended to provide additional funds to enable FLI to meet maturing bond obligations on Feb. 8, 2002. When FDC sold FLI shares, it did not possess material information which had not been disclosed.

Yap reiterated that the sale of a little over P100 million worth of FLI shares was used in funding part of the P300-million loan provided by FDC to its subsidiary FLI. FLI, in turn, used the funds together with the proceeds from its P1.2 billion bond issuance to retire its $100-million convertible bond which matured last Feb. 2002.

The FDC president further informed that FDC did not buy back any shares and did not make any gain from the transaction. FDC, in fact, incurred a financial loss from the sale. "The loss is secondary to our maintaining a strong credit track record. We are very proud of the fact that both FDC and FLI have successfully retired a total of $250 million in convertible bonds under a challenging economic scenario. We believe that the prompt payment of our bond obligations is in fact the overriding event that has influenced shareholder value. The investors have upheld this belief when after a better understanding of FLI’s latest bond issuance and the timely payment of its bond obligation, the share price of FLI rose to a peak of P3.1, way beyond the level prior to the disclosure and payment of its bonds."

"We are hopeful that the SEC will appreciate FDC’s actions to protect shareholder value and with the information we have now provided recognize that the discharge of our corporate responsibility does not constitute insider trading," Yap continued. "We hope that an early resolution of this matter should revive investor interest in FLI whose value has been temporarily dampened by this investigation.

DIRECTOR TOMAS C

ESTELITO P

FDC

FEB

FILINVEST DEVELOPMENT CORP

FILINVEST LAND INC

FLI

IN FILINVEST

JOSEPHINE GOTIANUN YAP

SYQUIA OF THE COMPLIANCE AND ENFORCEMENT DEPARTMENT OF THE SECURITIES AND EXCHANGE COMMISSION

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