Minority owners seek injunction vs UOBP

The Farmix group, a minority bloc at the United Overseas Bank of the Philippines (UOBP), has filed a petition for a court injunction seeking to restrain the present board from holding office.

Named defendants in the suit filed before the Makati Regional Trial Court are the Singapore-based United Overseas Bank Ltd., mother unit of UOBP and several government officials including Wee Cho Yaw, Chua Teng Hui Wee EE Chong, Samuel Poon Hon Thang, Terence Ong Sea Eng and Wang Lian Khee; Asian Institute of Management chief executive Roberto F. de Ocampo; Florentino M. Herrera III, Marianne Malate-Guerrero; Securities and Exchange Commission chief Lilia Bautista, and Bangko Sentral ng Pilipinas governor Rafael Buenaventura.

The Farmix group consists of the Farmix Fertilizer Corp., PearlBank Securities Inc., Manuel Tankiansee and Juanita U. Tan, which used to have control of over 10-percent equity in the bank worth P25.8 million.

The group also sought a permanent injunction on the board of the bank until all intra-corporate problems are resolved.

"After due hearing, a preliminary injunction be issued restraining the private individual defendants from sitting in or acting as a board for calendar year 2003-2004," the petition said. It further sought that the courts appoint a receiver for the bank until final resolution of the problems.

The focus of the petition was the election of the directors of the UOBP, a pending derivative suit, and other complexities arising from continued and unresolved "intra-corporate relations between and among stockholders, and the bank.

The Farmix group wants the courts to declare as null and void the board elections last May 30 this year, and that they be paid the equivalent of the sum of the stakes sold to UOB Ltd.

The group was part of the minority bloc of Filipino businesses and individuals with stakes in UOBP, led by the group of former Finance Secretary Edgardo Espiritu and Jollibee Food Corp. president Antonio Tan Caktiong.

The majority group represented by UOB Ltd. bought out the minority group but the payment was allegedly coursed through the Espiritu group. However, the Farmix group claims that they had already withdrawn the power of attorney of the Espiritu group as their representative.

The problem has limited the growth of UOBP and in fact, it has even caught the attention of legislators. UOBP is a medium-sized commercial bank operating in the Philippines under the banner of UOB Ltd., one of the bigger banks in Singapore.

BSP governor Buenaventura had already called on both parties to settle the issue and find a win-win formula or face the risk of losing the bank.

"The sooner they resolve the issue the better for the bank. Continued strife would likely result to a loss of depositors and other bank clients. Posturing by both parties is all counter-productive," Buenaventura added.

UOBP used to be Westmont Bank before it was acquired by UOB Ltd. for $1.6-billion to get majority control of the bank.