The management of Philippine Racing Club Inc. (PRCI) said the purchase and subsequent sale of the shares of its subsidiary JTH Davies were above board and known to all shareholders of the publicly-listed horse race track operator.
PRCI president Solomon Cua said the firm’s minority group was hurling baseless and malicious innuendoes that have no basis as he pointed out that all shareholders were fully informed about the sale and that the company even gained P23.5 million from the sale.
“These transactions were all reported and discussed in the PRCI board where the minority shareholders were represented by no less than Atty. Brigido Dulay,” he said.
Cua explained that PRCI bought 43 million JTH Davies shares at P10.71 per share for a total consideration of P462.5 million. After the sale, JTH Davies paid out a cash dividend of P6 a piece for a total of P258.5 million in January this year, resulting in a reduction in JTH Davies’ share price to P4.71 each share.
He said PRCI then decided to sell some of its shares in JTH to bring down the cost of its investment. “PRCI sold 12.99 million shares in JTH at an average price of P6.60 per share. This led to PRCI booking a profit of approximately P23.5 million.”
The 12.99 million JTH Davies shares that were sold, representing 29.62 percent of the company, was taken up by several investors and not just one person, Cua pointed out.
“It is therefore unfair for them hurl these baseless accusations now when they had full knowledge of these transactions. It is the minority shareholders, not the PRCI management, who are not being fair and transparent,” Cua said.
PRCI majority shareholders approved Wednesday the share-for-property swap deal entered into with JTH Davies in spite of a temporary restraining order obtained by minority shareholders from the Makati Regional Trial Court that enjoined certain directors of PRCI from presenting and ratifying certain actions, particularly the share swap.
The majority shareholders said the TRO was defective since the case filed with the Makati RTC was covered by a similar case filed with the Supreme Court. They also pointed out that the Supreme Court had issued a ruling in April this year, reversing an order issued by a lower court enjoining PRCI from enforcing its share swap agreement with JTH.
Minority shareholders said they are planning to file criminal charges against PRCI management for disregarding the TRO issued by the Makati RTC.
The approval of the share swap deal will pave the way for the redevelopment of the 21-hectare race track in Makati into a commercial and residential complex envisioned to become the next Rockwell or Eastwood.
The transfer of the race track to Cavite has long been expected and as early as 1996.
Cua also stressed that the Malaysian investors in PRCI, who represent a respected publicly listed firm in Kuala Lumpur, came with good faith and money in hand since the 1990s. “They are here for the long haul and they want their investments to grow as PRCI grows.”