MANILA, Philippines — Businessman Roberto "Bobby" Ongpin and his associates now own 50.57% of property developer Alphaland Corporation, bringing down the stake held by London-based private equity fund Ashmore group.
In a statement on Tuesday, January 21, Ongpin's group said the increase followed a capital call on which the Ashmore group defaulted.
The business relationship of Ongpin and the private fund turned sour last year after Ashmore declared it was no longer willing to fund Alphaland. Ongpin later confirmed to Rappler that he and Ashmore were parting ways after 7 years of partnership. Ongpin represented Ashmore in several Philippine companies, including Alphaland, San Miguel Corporation, PAL Holdings and Petron Corporation. (READ: Ongpin, Ashmore to part ways)
Ongpin's group said in its statement that Alphaland's board of directors approved a capital call for all shareholders, with a payment deadline of January 15. Failing to meet the deadline would dilute a shareholder's holdings.
Ashmore filed for an ex parte temporary restraining order to stop the capital call before the Makati Regional Trial Court. The court however denied this petition.
With the lapse of the deadline, Ongpin's group said Ashmore's holdings were diluted to 24.41%, with two board seats. This includes a 2.5% stake that Ongpin said Ashmore "misrepresented" as having been sold.
The Ongpin group's holdings, on the other hand, increased to 50.57%, with 13 board seats.
Ongpin's group claimed Ashmore committed a "serious irregularity" when it misrepresented an equity deal in 2012 to keep Alphaland listed on the Philippine Stock Exchange (PSE).
In January 2013, Alphaland shares were suspended from trading as the company's public float of 8.03% was below the PSE's minimum required of 10%. Alphaland applied for the lifting of the suspension, reporting that Ashmore had sold 49.6 million shares equivalent to a 2.5% stake to Credit Suisse. The said sale increased Alphaland's public float to 10.53%.
But Ongpin's group said it learned recently that Ashmore was still the beneficial owner of the block of shares. “This is a very serious issue. They could lose their license.”
Alphaland is a property company with high-end developments, including the 3-tower Alphaland Makati Place, the P4-billlion members-only Balesin Island Club in Quezon province, and the P2-billion Alphaland Marina Club, which has hundreds of berths for boats of all sizes.
Reports of Ongpin's falling out with Ashmore followed legal issues involving the former Marcos trade minister. Ongpin's bank accounts were ordered frozen by the Court of Appeals late 2012 in relation to an alleged P660-million behest loan deal with state-run Development Bank of the Philippines (DBP). At the height of the DBP controversy, Ongpin even admitted that Ashmore summoned him to London to explain the issue.
But Ongpin said his disagreements with Ashmore was over Alphaland's fund raising.
He added the end of their relationship was part of the usual 7-year investment cycle that private equity funds go through. "People who understand the private equity fund business know that these funds normally have a 7-year life. The relationship between myself and Ashmore started in 2006 and is now nearing its 7-year life, which means that the invested funds need to be liquidated and returned to the investors in the fund." – Rappler.com