Conditions set for resumption of Meralco shares trading

The Philippine Stock Exchange (PSE) together with the Philippine Depository & Trust Co. and the Securities Clearing Corp. of the Philippines, have set conditions prior to the lifting of the trading suspension on shares of power utility giant Manila Electric Co (Meralco).

These prerequisites were important given the need to preserve the integrity and viability of the trading, clearing, and settlement and depository processes and infrastructure of the capital market as well as protect the investing public, the PSE said.

Among these conditions include: Meralco shall re-confirm the 37,233,200 quarantined shares as defective for lodgement and trading on account of the pending dispute affecting these shares; Meralco shall fully honor the title and rights of the purchasers of the 3.37 million traded and settled shares; Meralco shall not authorize the lodging into the depository of any or all of the 1.4 million unlodged disputed shares nor perform any action that would undermine the integrity and efficacy of each of PSE, SCCP and PDTC as stock market infrastructure providers; and Meralco must fully indemnify and hold free the PSE, SCCP, and PDTC for any losses, damages, claims or liabilities that any or all of them may sustain in connection with the disputed shares, including the traded and settled shares, the quarantined shares and traded but unsettled shares.

The PSE has urged Meralco to take all actions necessary in the soonest possible time to allow the resumption of trading in Meralco shares.

Just last Thursday, Meralco asked the PSE to immediately lift the trading suspension after having segregated the shares that are subject of a dispute between the  giant power distributor, a minority shareholder and Land Bank of the Philippines.

In a letter to the PSE, Meralco corporate secretary Emmanuel Sison said the PDTC has declared that the non-fungibility of all Meralco shares lodged in the depository has been cured, making these shares once again fit for use in the settlement of trades in the the PSE and other depository.

Sison said Meralco shall  not authorize the lodgment of any or all of these quarantined shares except in accordance with a final and/or executory ordered issued by the proper government agency or instrumentality or court of competent jurisdiction resolving the dispute.

PSE president and chief executive officer Francis Lim said the exchange is working double time to lift the trading suspension on Meralco shares which was implemented last month after the Lopez-led utility firm canceled about 42 million shares held by the LandBank.

Lim said while the bank shares claimed by a certain Josefina S. Lubrica had been segregated from the rest of the Meralco shares, there were still issues that need to be resolved.

The disputed Meralco shares represent about 3.8 percent of the total issued stock and constitute a substantial part of the 10-percent block that government financial institutions  agreed to sell to Global 5000 Investment, an investment fund led by businessmen Inigo Zobel, Roberto Ongpin and Joselito Campos.