Voting Preferred Shares and Corporate Control

Philippine Management Review 2022, Vol. 29, 149-160.

Voting Preferred Shares and Corporate Control: Impact on Minority Stockholders’ Rights

”–Š—”Ǥƒ›ƒƒ^ȗ

University of the Philippines, Cesar E.A. Virata School of Business, Diliman, Quezon City 1101, Philippines

Š‹•’ƒ’‡”†‹•…—••‡•–Š‡…‘…‡”•”‡Žƒ–‡†–‘–Š‡‹••—ƒ…‡‘ˆ˜‘–‹‰’”‡ˆ‡””‡†•Šƒ”‡•„›•‡Ž‡…–‡†

Ž‹•–‡†Š‹Ž‹’’‹‡…‘’ƒ‹‡•ǤŠ‡•‡…‘…‡”•‹…Ž—†‡–Š‡”ƒ–‹‘ƒŽ‡„‡Š‹†–Š‡‹••—ƒ…‡‘ˆ–Š‡•‡

˜‘–‹‰’”‡ˆ‡””‡†•–‘…•ǡŽ‹‹–‡†ƒ……‡••–‘–Š‡‹••—‡–‘…‘–”‘ŽŽ‹‰•–‘…Š‘Ž†‡”•ǡ˜‡”›Ž‘™‘ˆˆ‡”

’”‹…‡•”‡Žƒ–‹˜‡–‘–Š‡…‘‘•Šƒ”‡•ǡ‘ǦŽ‹•–‹‰‘ˆ–Š‡•‡•‡…—”‹–‹‡•‹–Š‡Š‹Ž‹’’‹‡–‘…

š…Šƒ‰‡ȋȌǡƒ†–Š‡†‹Ž—–‹on of minority stockholders’ voting rights as a consequence of

‹••—‹‰–Š‡•‡•–‘…•Ǥ

1 Introduction

“Here is one misleading filing that the SEC tolerates. Has anyone noticed the continued posting of public ownership reports (POR) on the website of the Philippine Stock Exchange (PSE) that do not reflect the true ownership profile of a listed company?” ȋ‡”‡œǡʹͲͳͷȌ

Š‡•‡ƒ”‡“—‘–‡•ˆ”‘‡–‡”‹‘‡”‡œǡƒŒ‘—”ƒŽ‹•–ˆ”‘Š‡ƒ‹Žƒ‹‡•Ǥƒ•‡†‘•ǡ•‘‡

of these listed companies’ common stocks are owned ‘”‡–ŠƒͷͲΨ„›–Š‡’—„Ž‹…Ǥ‡–ƒ‡šƒ‹ƒ–‹‘

‘ˆ –Š‡ ‡„‡”• ‘ˆ –Š‡ „‘ƒ”† ‘ˆ †‹”‡…–‘”• •Š‘™• –Šƒ– ƒŽŽ –Š‡ †‹”‡…–‘”•ǡ ‹…Ž—†‹‰ –Š‡ ‹†‡’‡†‡–

†‹”‡…–‘”•ǡƒ”‡‘‹‡‡•‘ˆ–Š‡ƒŒ‘”‹–›•–‘…Š‘Ž†‡”•ȋ‡”‡œǡʹͲͳͷȌǤ^ͳ

Š‡”‡ ƒ”‡ †‡…‹•‹‘• ‘ˆ ƒ…‘’ƒ›–Šƒ– ”‡“—‹”‡•—’‡” ƒŒ‘”‹–› ˜‘–‡ ‘ˆƒ– Ž‡ƒ•––™‘Ǧ–Š‹”†• ‘ˆ ‹–•

‘—–•–ƒ†‹‰ …ƒ’‹–ƒŽ •–‘… •—…Š ƒ• ƒ ƒ‡†‡– ‘ˆ –Š‡ ƒ”–‹…Ž‡• ‘ˆ ‹…‘”’‘”ƒ–‹‘^ʹ ƒ† ‹…”‡ƒ•‡ ‘”

†‡…”‡ƒ•‡‹…ƒ’‹–ƒŽ•–‘…ǡƒ‘‰‘–Š‡”•Ǥ^͵Š‡Ž‹•–‡†Š‹Ž‹’’‹‡…‘’ƒ‹‡••‡‡–‘Šƒ˜‡‘’”‘„Ž‡•

ȗ‘””‡•’‘†‡…‡ǣƒ•…ƒ›ƒƒ̷—’Ǥ‡†—Ǥ’Š

ͳ‡…‘‡†ƒ–‹‘ͷǤʹ‘ˆ–Š‡‘†‡‘ˆ‘”’‘”ƒ–‡‘˜‡”ƒ…‡ˆ‘”—„Ž‹…Ž›‹•–‡†‘’ƒ‹‡•ǡƒ•”‡˜‹•‡†‹ʹͲͳ͸ǡ

’”‡•…”‹„‡•–Š‡“—ƒŽ‹ˆ‹…ƒ–‹‘•ˆ‘”‹†‡’‡†‡–†‹”‡…–‘”•Ǥ›•–‘…Š‘Ž†‡”…ƒ•—„‹–ƒ‘‹ƒ–‹‘ˆ‘”ƒ†‹”‡…–‘”ǡ

‘”ƒŽŽ› •‡– –‘ –Š‡ …‘”’‘”ƒ–‡ •‡…”‡–ƒ”›Ǥ Š‡ ‘‹ƒ–‹‘• ƒ”‡ •…”‡‡‡† „› –Š‡ ‘‹ƒ–‹‘• ƒ† …‘”’‘”ƒ–‡

governance committee, or its equivalent, which finalizes the list of directors to be included for board’s and shareholders’ approval. The probability of getting admitted to the board of d‹”‡…–‘”•‹•…‘–‹‰‡–‘–Š‡—„‡”

‘ˆ•Šƒ”‡••—’’‘”–‹‰–Š‡‘‹ƒ–‹‘‘ˆƒ†‹”‡…–‘”Ǥ–Š‡‡†ǡ‹–‹•–Š‡•–‘…Š‘Ž†‡”•™‹–Š‘”‡˜‘–‹‰•Šƒ”‡•™Š‘

™‹ŽŽ‡†—’†‡–‡”‹‹‰™Š‘™‹ŽŽ…‘’”‹•‡–Š‡„‘ƒ”†ǡ‹…Ž—†‹‰–Š‡‹†‡’‡†‡–†‹”‡…–‘”•Ǥ

ʹ‡š…‡”’–ˆ”‘‡…–‹‘ͳͷ‘ˆ–Š‡‡˜‹•‡†‘†‡‘ˆ–Š‡Š‹Ž‹’’‹‡•ȋ‡’—„Ž‹……–‘Ǥͳͳʹ͵ʹȌ•–ƒ–‡•–Š‡ˆ‘ŽŽ‘™‹‰ǣ

“ǤͳͷǤ‡†‡–‘ˆ”–‹…Ž‡•‘ˆ…‘”’‘”ƒ–‹‘Ǥ–Ž‡••‘–Š‡”™‹•‡’”‡•…”‹„‡†„›–Š‹•‘†‡‘”„›•’‡…‹ƒŽŽƒ™ǡ

ƒ†ˆ‘”Ž‡‰‹–‹ƒ–‡’—”’‘•‡•ǡƒ›’”‘˜‹•‹‘‘”ƒ––‡”•–ƒ–‡†‹–Š‡ƒ”–‹…Ž‡•‘ˆ‹…‘”’‘”ƒ–‹‘ƒ›„‡ƒ‡†‡†„›ƒ

ƒŒ‘”‹–›˜‘–‡‘ˆ–Š‡„‘ƒ”†‘ˆ†‹”‡…–‘”•‘”–”—•–‡‡•ƒ†–Š‡˜‘–‡‘”™”‹––‡ƒ••‡–‘ˆ–Š‡•–‘…Š‘Ž†‡”•”‡’”‡•‡–‹‰

ƒ–Ž‡ƒ•––™‘Ǧ–Š‹”†•ȋʹȀ͵Ȍ‘ˆ–Š‡‘—–•–ƒ†‹‰…ƒ’‹–ƒŽ•–‘…ǡ™‹–Š‘—–’”‡Œ—†‹…‡–‘–Š‡ƒ’’”ƒ‹•ƒŽ”‹‰Š–‘ˆ†‹••‡–‹‰

•–‘…Š‘Ž†‡”• ‹ ƒ……‘”†ƒ…‡ ™‹–Š –Š‡ ’”‘˜‹•‹‘• ‘ˆ –Š‹• ‘†‡Ǥ Š‡ ƒ”–‹…Ž‡• ‘ˆ ‹…‘”’‘”ƒ–‹‘ ‘ˆ ƒ ‘•–‘… …‘”’‘”ƒ–‹‘ƒ›„‡ƒ‡†‡†„›–Š‡˜‘–‡‘”™”‹––‡ƒ••‡–‘ˆƒŒ‘”‹–›‘ˆ–Š‡–”—•–‡‡•ƒ†ƒ–Ž‡ƒ•––™‘Ǧ–Š‹”†•ȋʹȀ͵Ȍ

‘ˆ–Š‡‡„‡”•Ǥ”

–Š‡”–”ƒ•ƒ…–‹‘•ƒ††‡…‹•‹‘•–Šƒ–‡‡†ƒ’’”‘˜ƒŽ‘ˆƒ–Ž‡ƒ•––™‘Ǧ–Š‹”†•‘ˆ–Š‡‘—–•–ƒ†‹‰…ƒ’‹–ƒŽ•–‘…„ƒ•‡†

‘–Š‡”‡˜‹•‡†‘”’‘”ƒ–‹‘‘†‡‘ˆ–Š‡Š‹Ž‹’’‹‡•ƒ”‡–Š‡ˆ‘ŽŽ‘™‹‰ǣ”‡‘˜ƒŽ‘ˆ†‹”‡…–‘”•‘”–”—•–‡‡•ȋ‡…–‹‘

ʹ͹ȌǢ’‘™‡”–‘‡š–‡†‘”•Š‘”–‡…‘”’‘”ƒ–‡–‡”ȋ‡…–‹‘͵͸ȌǢ’‘™‡”–‘‹…”‡ƒ•‡‘”†‡…”‡ƒ•‡…ƒ’‹–ƒŽ•–‘…‘”‹…—”ǡ …”‡ƒ–‡ǡ‘”‹…”‡ƒ•‡„‘†‡†‹†‡„–‡†‡••ȋ‡…–‹‘͵͹ȌǢ’‘™‡”–‘†‡›’”‡‡’–‹˜‡”‹‰Š–ȋ‡…–‹‘͵ͺȌǢ•ƒŽ‡‘”‘–Š‡”

†‹•’‘•‹–‹‘‘ˆƒ••‡–•ȋ‡…–‹‘͵ͻȌǢ’‘™‡”–‘‹˜‡•–…‘”’‘”ƒ–‡ˆ—†•‹ƒ‘–Š‡”…‘”’‘”ƒ–‹‘‘”„—•‹‡••‘”ˆ‘”ƒ›

‘–Š‡”’—”’‘•‡ȋ‡…–‹‘ͶͳȌǢ’‘™‡”–‘†‡…Žƒ”‡†‹˜‹†‡†•ȋ‡…–‹‘ͶʹȌǢ’‘™‡”–‘‡–‡”‹–‘ƒƒ‰‡‡–…‘–”ƒ…– ȋ‡…–‹‘Ͷ͵ȌǢƒ‡†‡––‘„›Žƒ™•ȋ‡…–‹‘Ͷ͹ȌǢƒ†‡”‰‡”•ƒ†ƒ…“—‹•‹–‹‘•ȋ‡…–‹‘͹͸ȌǤ

͵’”‡‡’–‹˜‡”‹‰Š–‰‹˜‡•ƒ‡š‹•–‹‰•–‘…Š‘Ž†‡”–Š‡”‹‰Š––‘•—„•…”‹„‡–‘‡™‹••—ƒ…‡‘ˆ•Šƒ”‡•„›ƒ…‘’ƒ›

„ƒ•‡† ‘ Š‹• ’”‘’‘”–‹‘ƒ–‡ ‹–‡”‡•– ‹ –Šƒ– …‘’ƒ›Ǥ Š‹• ”‹‰Š–ǡ ‹ˆ ‡š‡”…‹•‡†ǡ ’”‡˜‡–• †‹Ž—–‹‘‘ˆ ƒ ‡š‹•–‹‰

stockholder’s interest in a company when new shares are issued.

ͳͷͲ Voting preferred shares and corporate control: Impact on minority stockholders’ rights

‰‡––‹‰ ƒŽŽ –Š‡•‡ †‡…‹•‹‘• ƒ’’”‘˜‡†ǡ ‡˜‡ ‹ˆ –Š‡‹” ”‡•’‡…–‹˜‡ • •Š‘™ –Šƒ– –Š‡ …‘–”‘ŽŽ‹‰

•–‘…Š‘Ž†‡”•†‘‘–‘™‘””‡’”‡•‡––™‘Ǧ–Š‹”†•‘ˆ–Š‡…‘‘•–‘…•Ǥ^Ͷ

–”‹‡† –‘ ‹…”‡ƒ•‡ ’—„Ž‹… ‘™‡”•Š‹’ „› ‹…”‡ƒ•‹‰ –Š‡ ‹‹— ’—„Ž‹… ˆŽ‘ƒ–Ǥ Š”‘—‰Š

‡‘”ƒ†—‹”…—Žƒ”‘Ǥͳ͵‡”‹‡•‘ˆʹͲͳ͹†ƒ–‡†‡…‡„‡”ͳǡʹͲͳ͹ǡ–Š‡‡…—”‹–‹‡•ƒ†š…Šƒ‰‡

‘‹••‹‘ ȋȌ ‹…”‡ƒ•‡† –Š‡ ‹‹— ’—„Ž‹… ‘™‡”•Š‹’ ȋȌ ˆ‘” …‘’ƒ‹‡• Šƒ˜‹‰ ‹‹–‹ƒŽ

’—„Ž‹…‘ˆˆ‡”‹‰ȋȌ–‘ƒ–Ž‡ƒ•–ʹͲΨǡˆ”‘–Š‡ƒ––Šƒ––‹‡‘ˆͳͲΨȋ‹”…—Žƒ”‘Ǥͳ͵ǡʹͲͳ͹ȌǤ

Š‡”—Ž‡ǡŠ‘™‡˜‡”ǡ™ƒ•‘Ž›ƒ’’Ž‹…ƒ„Ž‡–‘–Š‡‡™•Ǥ‘‰–Š‡”‡ƒ•‘•…‹–‡†ˆ‘”–Š‡‹…”‡ƒ•‡™‡”‡

–Š‡ˆ‘ŽŽ‘™‹‰ȋ‹”…—Žƒ”‘Ǥͳ͵ǡʹͲͳ͹Ȍǣ

ͳǤ ‘’”‘˜‹†‡Ž‹“—‹†‹–›™Š‹…Š‹–—”ƒ––”ƒ…–•‰‘‘†Ǧ“—ƒŽ‹–›ƒ†Ž‘‰Ǧ–‡”‹˜‡•–‘”•Ǥ ʹǤ ‘‹’”‘˜‡ƒ”‡–‡ˆˆ‹…‹‡…›ƒ†”‡†—…‡’”‹…‡˜‘Žƒ–‹Ž‹–›Ǥ

͵Ǥ ‘”‡†—…‡–Š‡‘’’‘”–—‹–‹‡•ˆ‘”…‘ŽŽ—•‹˜‡ƒ”‡–ƒ…–‹‘‘”’”‹…‡ƒ‹’—Žƒ–‹‘ƒ†‡…‘—”ƒ‰‡

‰‘‘†‰‘˜‡”ƒ…‡Ǥ

ͶǤ To enhance the country’s relative weight in globally tracked free floatǦƒ†Œ—•–‡† ƒ”‡–

…ƒ’‹–ƒŽ‹œƒ–‹‘™‡‹‰Š–‡†‹†‹…‡•–‘ƒ––”ƒ…–‘”‡…ƒ’‹–ƒŽǤ

ͷǤ ‘‡•—”‡–Šƒ––Š‡‘„Œ‡…–‹˜‡•‘ˆ–Š‡‡…—”‹–‹‡•‡‰—Žƒ–‹‘‘†‡ȋȌƒ”‡‡–Ǥ

Š‡„‡‡ˆ‹–•‘ˆ‹…”‡ƒ•‹‰–Š‡’—„Ž‹…ˆŽ‘ƒ–™‹ŽŽ„‡‡‰ƒ–‡†‹ˆ™‹ŽŽ‘–…‘•‹†‡”–Š‡‹’Ž‹…ƒ–‹‘•

‘ˆ –Š‡ ‹••—ƒ…‡ ‘ˆ ƒ‘–Š‡” …Žƒ•• ‘ˆ •Šƒ”‡• ™Š‹…Š ƒŽŽ‘™• …‘–”‘ŽŽ‹‰ •–‘…Š‘Ž†‡”• –‘ Šƒ˜‡ ƒ„•‘Ž—–‡

…‘–”‘Ž‘˜‡”–Š‡Ž‹•–‡†…‘’ƒ‹‡•ǡ•—…Šƒ•–Š‡‹••—ƒ…‡‘ˆ˜‘–‹‰’”‡ˆ‡””‡†•–‘…Ǥ

‘’ƒ‹‡•‹••—‡’”‡ˆ‡””‡†•–‘…•–‘ˆ—†‡š’ƒ•‹‘ǡ’ƒ›ƒ–—”‹‰‘„Ž‹‰ƒ–‹‘•ǡ‘”ˆ‹ƒ…‡™‘”‹‰

…ƒ’‹–ƒŽ”‡“—‹”‡‡–•ǤʹͲʹͲǡ‡‰ƒ™‹†‡‘•–”—…–‹‘‘”’‘”ƒ–‹‘ȋȌ”ƒ‹•‡†ͶǤ͵„‹ŽŽ‹‘

ˆ”‘‹••—‹‰’”‡ˆ‡””‡†•–‘…•–‘•—’’‘”–‹–•‰”‘™‹‰‹ˆ”ƒ•–”—…–—”‡’‘”–ˆ‘Ž‹‘ȋŽƒœƒǡʹͲʹͲȌǤʹͲʹͳǡ ”ƒ‹•‡† ƒ‘–Š‡”Ͷ „‹ŽŽ‹‘ –Š”‘—‰Š’”‡ˆ‡””‡† •–‘… ‹••—ƒ…‡ –‘ ”‡†‡‡ –Š‡ Ͷ„‹ŽŽ‹‘

™‘”–Š‘ˆ’”‡ˆ‡””‡†•–‘…•‹••—‡†‹ʹͲͳͶȋ—ƒŽ‡’‘”–ǡʹͲʹͳȌǤ

”‡ˆ‡””‡†•–‘…•…‘„‹‡‹˜ƒ”›‹‰†‡‰”‡‡•–Š‡…Šƒ”ƒ…–‡”‹•–‹…•‘ˆ„‘–Š†‡„–ƒ†‡“—‹–›•‡…—”‹–‹‡•Ǥ

”‡ˆ‡””‡† •Šƒ”‡• ƒ› …‘–ƒ‹ ƒ› ‘” ƒ …‘„‹ƒ–‹‘ ‘ˆ –Š‡ ˆ‘ŽŽ‘™‹‰ ˆ‡ƒ–—”‡•ǣ …ƒ•Š †‹˜‹†‡†•ǡ

’”‡ˆ‡”‡…‡ ‘˜‡” …‘‘ •Šƒ”‡• †—”‹‰ †‹••‘Ž—–‹‘ǡ …‘˜‡”–‹„‹Ž‹–› –‘ …‘‘ •Šƒ”‡•ǡ ƒ†

’ƒ”–‹…‹’ƒ–‹‰ǡ^ͷ…——Žƒ–‹˜‡ǡ^͸ƒ†˜‘–‹‰”‹‰Š–•ǤŽ‹‡„‘†•ǡŠ‘™‡˜‡”ǡ’”‡ˆ‡””‡†•–‘…•ƒ”‡…Žƒ••‹ˆ‹‡†

ƒ•‡“—‹–›‹–Š‡„ƒŽƒ…‡•Š‡‡–„—–Šƒ˜‡‰‡‡”ƒŽŽ›‘˜‘–‹‰”‹‰Š–•ȋƒ”“—‹–Ƭ—””›ǡʹͲʹʹȌǤ

˜‡”–Š‡›‡ƒ”•ǡ’”‡ˆ‡””‡†•–‘…•™‹–Š†‹ˆˆ‡”‡–ˆ‡ƒ–—”‡•Šƒ˜‡„‡‡‹••—‡†„›Š‹Ž‹’’‹‡…‘’ƒ‹‡•ǡ

†‡’‡†‹‰ ‘ ™Š‹…Š –ƒ”‰‡– ƒ”‡– –Š‡› ƒ”‡ …ƒ–‡”‹‰ –‘Ǥ ‘‡ ‘ˆ –Š‡•‡ ‹••—ƒ…‡• ƒ”‡ †‡•‹‰‡† ˆ‘”

‹•–‹–—–‹‘ƒŽ ‹˜‡•–‘”•Ǥ ‡…‡ǡ –Š‡•‡ ‹••—‡• ‘ˆˆ‡” ”‡‰—Žƒ” …ƒ•Š †‹˜‹†‡†• ƒ† •‘‡–‹‡• ‰‡‡”‘—•

†‹˜‹†‡†›‹‡Ž†•ǤŠ‡”‡ƒ”‡ƒŽ•‘’”‡ˆ‡””‡†•–‘…•‹••—‡†„›Š‹Ž‹’’‹‡…‘’ƒ‹‡•™‹–Š˜‘–‹‰”‹‰Š–•Ǥ

Š‹•˜‘–‹‰”‹‰Š–•ˆ‡ƒ–—”‡ƒ‡•–Š‡’”‡ˆ‡””‡†•–‘…•‘Ž‘‰‡”†‹ˆˆ‡”‡–ˆ”‘–Š‡…‘‘•–‘…•ǡ …‘•‹†‡”‹‰–Šƒ––Š‡›Šƒ˜‡‘–Š‡”ƒ––”‹„—–‡•Ž‹‡Šƒ˜‹‰…——Žƒ–‹˜‡†‹˜‹†‡†•™Š‹…Šƒ”‡‘–ƒ˜ƒ‹Žƒ„Ž‡

–‘…‘‘•–‘…•Ǥ

ͶŠ‡…‘–”‘ŽŽ‹‰•–‘…Š‘Ž†‡”•‘ˆ•‘‡‘ˆ–Š‡•‡…‘’ƒ‹‡•ƒ”‡ƒ„Ž‡–‘Šƒ˜‡–Š‡–™‘Ǧ–Š‹”†•˜‘–‡„‡…ƒ—•‡‘ˆ–Š‡‹”

˜‘–‹‰’”‡ˆ‡””‡†•–‘…•ǡ‹ƒ††‹–‹‘–‘–Š‡‹”…‘‘•–‘…•ǤŠ‡–™‘Ǧ–Š‹”†•˜‘–‡‹•„ƒ•‡†‘–Š‡‘—–•–ƒ†‹‰

…ƒ’‹–ƒŽ•–‘…™Š‹…Š‹…Ž—†‡•…‘‘•–‘…•ƒ†˜‘–‹‰’”‡ˆ‡””‡†•–‘…•ǤŠ‡•†‹•…Ž‘•‡†‹–Š”‘—‰Š–Š‡

“Top 100 Stockholders” report are exclusive to common stocks and do not include the voting preferred stocks.

ͷŠ‹•’ƒ”–‹…‹’ƒ–‹‰ˆ‡ƒ–—”‡‡ƒ•–Šƒ–’”‡ˆ‡””‡†•–‘…Š‘Ž†‡”•…ƒ”‡…‡‹˜‡‘”‡–Šƒ–Š‡”‡‰—Žƒ”…ƒ•Š†‹˜‹†‡†•

–Š‡›ƒ”‡‡–‹–Ž‡†–‘™Š‡–Š‡…‘’ƒ›‡ƒ”••‹‰‹ˆ‹…ƒ–‡ƒ”‹‰•ǡ‘”™Š‡…‘‘•–‘…Š‘Ž†‡”•”‡…‡‹˜‡•’‡…‹ƒŽ

…ƒ•Š†‹˜‹†‡†•ǡ‘–‘’‘ˆ–Š‡”‡‰—Žƒ”…ƒ•Š†‹˜‹†‡†•Ǥ

͸——Žƒ–‹˜‡‡ƒ•–Šƒ–‹ˆ–Š‡†‹˜‹†‡†•‹ƒ‰‹˜‡›‡ƒ”ƒ”‡‘–†‡…Žƒ”‡†„‡…ƒ—•‡‘ˆ‹•—ˆˆ‹…‹‡–”‡–ƒ‹‡†‡ƒ”‹‰•

or lack of cash, or for whatever reasons, these unpaid dividends are accumulated through an account “dividends

‹ƒ””‡ƒrs.” No cash dividends will be distributed to the common stockholders unless these dividends in arrears

ƒ”‡’ƒ‹†ˆ‹”•–Ǥ

Arthur S. Cayanan ͳͷͳ

2 Review of Literature

”‡ˆ‡””‡†•–‘…Š‘Ž†‡”•ƒ”‡’”‡ˆ‡””‡†–‘–Š‡‡š–‡––Šƒ––Š‡…‘”’‘ration’s charter allows them to

Šƒ˜‡ ƒ†˜ƒ–ƒ‰‡• ‘˜‡”–Š‡ …‘‘ •Šƒ”‡Š‘Ž†‡”•Ǥ Š‡•‡ ƒ†˜ƒ–ƒ‰‡• ‹…Ž—†‡ ’”‹‘”‹–› ‘˜‡” …‘‘

•–‘…Š‘Ž†‡”• †—”‹‰ Ž‹“—‹†ƒ–‹‘ ƒ† –Š‡ ”‹‰Š– –‘ ”‡…‡‹˜‡ …ƒ•Š †‹˜‹†‡†• ȋ‹–…Š‡ŽŽǡ ͳͻͻ͸ȌǤ Š‡•‡

ƒ†˜ƒ–ƒ‰‡•ƒ”‡ƒŽ•‘’”‘˜‹†‡†‹‡…–‹‘͸‘ˆ–Š‡‡˜‹•‡†‘”’‘”ƒ–‹‘‘†‡‘ˆ–Š‡Š‹Ž‹’’‹‡•™Š‹…Š

•–ƒ–‡• –Šƒ– ’”‡ˆ‡””‡† •Šƒ”‡• ƒ› „‡ ‰‹˜‡ ’”‡ˆ‡”‡…‡ ‹ –Š‡ †‹•–”‹„—–‹‘ ‘ˆ †‹˜‹†‡†• ƒ† ‹ –Š‡

†‹•–”‹„—–‹‘‘ˆƒ••‡–•ǡ‹…ƒ•‡‘ˆŽ‹“—‹†ƒ–‹‘ǤŠ‹Ž‡’”‡ˆ‡””‡†•–‘…Š‘Ž†‡”•ƒ”‡‰‹˜‡’”‡ˆ‡”‡…‡‹–Š‡

†‹•–”‹„—–‹‘‘ˆ†‹˜‹†‡†•ǡ‡…–‹‘Ͷʹ‘ˆ–Š‡‡˜‹•‡†‘”’‘”ƒ–‹‘‘†‡‘ˆ–Š‡Š‹Ž‹’’‹‡••–ƒ–‡•–Šƒ––Š‡

„‘ƒ”† ‘ˆ †‹”‡…–‘”• ‘ˆ ƒ •–‘… …‘”’‘”ƒ–‹‘ ƒ› †‡…Žƒ”‡ †‹˜‹†‡†• ‘—– ‘ˆ –Š‡ —”‡•–”‹…–‡† ”‡–ƒ‹‡†

‡ƒ”‹‰•‘ˆƒ…‘’ƒ›Ǥ……‘”†‹‰Ž›ǡ‘†‹˜‹†‡†•…ƒ„‡†‡…Žƒ”‡†‹ˆƒ…‘’ƒ›Šƒ•œ‡”‘‘”‡‰ƒ–‹˜‡

”‡–ƒ‹‡†‡ƒ”‹‰•Ǥ

‡–™‡‡ͳͻ͸Ͳ–‘ͳͻ͸͹ǡ–Š‡”‡™ƒ•ƒ‹…”‡ƒ•‹‰—„‡”‘ˆ‡”‰‡”•ƒ†ƒ…“—‹•‹–‹‘•‹–Š‡‹–‡†

–ƒ–‡•ˆ‹ƒ…‡†„›…‘˜‡”–‹„Ž‡’”‡ˆ‡””‡†•–‘…•^͹ȋ‹…Š‡•ǡͳͻ͹ͲȌ†—‡–‘–Š‡ˆ‘ŽŽ‘™‹‰’‘••‹„Ž‡”‡ƒ•‘•ǣ ͳǤ …“—‹”‹‰ ˆ‹”• ‡š’‡…– Š‹‰Š‡” ”‡–—”• ’‘•–Ǧƒ…“—‹•‹–‹‘ ƒ• …‘’ƒ”‡† –‘ ‡’Ž‘›‹‰ ‘–Š‡”

‘†‡•‘ˆˆ‹ƒ…‹‰ȋ‹…Š‡•ǡͳͻ͹ͲȌǤ

ʹǤ Š‡›‡ƒ„Ž‡–Š‡ƒ…“—‹”‹‰…‘’ƒ‹‡•–‘‡‡––Š‡‡š’‡…–‡†Ž‡˜‡Ž‘ˆ†‹˜‹†‡†’ƒ›‡–•‘ˆ–Š‡

acquired companies’ stockŠ‘Ž†‡”•ȋ‘Ž†‘ˆ•›ǡͳͻ͹ͳȌǤ

͵Ǥ Š‡›…ƒ’”‘˜‹†‡‡ƒ”‹‰•Ž‡˜‡”ƒ‰‡ˆ‘”–Š‡ƒ…“—‹”‹‰ˆ‹”•ǡ‡•’‡…‹ƒŽŽ›ˆ‘”‡”‰‡”•ƒ……‘—–‡†

ˆ‘”—•‹‰–Š‡’‘‘Ž‹‰‡–Š‘†ȋ‹…Š‡•ǡͳͻ͹ͲȌǤ^ͺ

ͶǤ Š‡…‘˜‡”•‹‘ˆ‡ƒ–—”‡ƒŽŽ‘™•–Š‡•Šƒ”‡Š‘Ž†‡”•‘ˆ–Š‡ƒ…“—‹”‡†…‘’ƒ›–‘„‡‡ˆ‹–ˆ”‘–Š‡

expected increase in the market price of the acquiring company’s stock (Soldofsky, 1971).

˜‡” –Š‡ ›‡ƒ”•ǡ †‹ˆˆ‡”‡– …Žƒ••‡• ‘ˆ ’”‡ˆ‡””‡† •–‘…• Šƒ˜‡ „‡‡ ‹••—‡† ™‹–Š ˜ƒ”›‹‰ ”‹‰Š–• ƒ†

ˆ‡ƒ–—”‡•Ǥ Š‡•‡ ˆ‡ƒ–—”‡• ‹…Ž—†‡ –Š‡ ˆ‘ŽŽ‘™‹‰ǣ ˜‘–‹‰ǡ ’ƒ”–‹…‹’ƒ–‹‰ǡ ”‡†‡‡ƒ„Ž‡ǡ …ƒŽŽƒ„Ž‡ǡ ƒ†

…‘˜‡”–‹„Ž‡Ǥ‘‡‹••—‡•’”‘˜‹†‡ˆ‘”–Š‡‡•–ƒ„Ž‹•Š‡–‘ˆƒ•‹‹‰ˆ—†ȋ”‘••ƒǡͳͻ͵ͳȌǤ

•–—†› ‘ˆ ʹͷͲ ‹†—•–”‹ƒŽ ’”‡ˆ‡””‡† ‹••—‡• ”‡˜‡ƒŽ‡† –Š”‡‡ –›’‡• ‘ˆ ˜‘–‹‰ ’”‡ˆ‡””‡† •–‘…•ǣ

’‡”ƒ‡–˜‘–‹‰™Š‡”‡–Š‡•Šƒ”‡Š‘Ž†‡”•Šƒ˜‡the right to participate in the stockholders’ meeting to

–Š‡‡š–‡–•–ƒ–‡†‹–Š‡…Šƒ”–‡”ǡ–‡’‘”ƒ”›˜‘–‹‰™Š‡–Š‡…‘”’‘”ƒ–‹‘‹•—ƒ„Ž‡–‘ƒ„‹†‡™‹–Š…‡”–ƒ‹

’”‘‹•‡• –‘ ’”‡ˆ‡””‡† •–‘…Š‘Ž†‡”•ǡ ƒ† …‘•‡– ˜‘–‹‰ ™Š‹…Š ‰‹˜‡• ’”‡ˆ‡””‡† •–‘…Š‘Ž†‡”• ˜‡–‘

’‘™‡”‘…‡”–ƒ‹’”‘’‘•‡†…‘”’‘”ƒ–‡ƒ…–‹‘•ȋ”ƒ†Ž‡›ǡͳͻͶͺȌǤ

Š‹Ž‡–Š‡”‡ƒ”‡ƒ†˜ƒ–ƒ‰‡•‹‹••—‹‰’”‡ˆ‡””‡†•–‘…•ǡ–Š‡”‡ƒ”‡ƒŽ•‘Ž‹‹–ƒ–‹‘•Ǥ–Š‡…ƒ•‡‘ˆ

’”‡ˆ‡””‡†•–‘…•™Š‹…ŠŠƒ˜‡ˆŽ‘ƒ–‹‰†‹˜‹†‡†”ƒ–‡•ǡ–Š‡—’•‹†‡’‘–‡–‹ƒŽƒ›„‡Ž‹‹–‡†„›–Š‡…Šƒ‰‡•

‹–Š‡‹†‡š–‘™Š‹…Š‹–‹•–‹‡†Ǥ’”‘˜‡‡–•‹˜ƒŽ—‡ƒ”‡‘”‡”‡Žƒ–‡†–‘…Šƒ‰‡•‹‹–‡”‡•–”ƒ–‡•ǡ

”ƒ–Š‡” –Šƒ ‘–Š‡” ˆƒ…–‘”•Ǥ ”‡ˆ‡””‡† •–‘…Š‘Ž†‡”•ǡ Ž‹‡ †‡„– Š‘Ž†‡”•ǡ Šƒ˜‡ Ž‹‹–‡† „‡‡ˆ‹–• ˆ”‘

‹’”‘˜‡†…‘”’‘”ƒ–‡’‡”ˆ‘”ƒ…‡ȋ‹–…Š‡ŽŽǡͳͻͻ͸ȌǤ”‡ˆ‡””‡†•Šƒ”‡Š‘Ž†‡”•ƒ›ƒŽ•‘„‡†‹•ƒ†˜ƒ–ƒ‰‡†

when the motivation of directors is to maximize common shareholders’ wealth by expropriating

’”‡ˆ‡””‡†•–‘…Š‘Ž†‡”•ȋ‹–…Š‡ŽŽǡͳͻͻ͸ȌǤ

‘–Š‡”†‹•ƒ†˜ƒ–ƒ‰‡‘ˆ’”‡ˆ‡””‡†•–‘…•‹•–Šƒ–†‹˜‹†‡†•ǡ—Ž‹‡‹–‡”‡•–‡š’‡•‡ǡƒ”‡‘––ƒšǦ

†‡†—…–‹„Ž‡ȋƒ˜‡’‘”–ǡͳͻͷ͸ȌǤ–Š‡Š‹Ž‹’’‹‡•ǡ–Š‡‰‡‡”ƒŽ”—Ž‡‹•–Šƒ–†‹˜‹†‡†’ƒ›‡–•ƒ”‡‘–

‹…Ž—†‡†‹–Š‡Ž‹•–‘ˆ‡š’‡•‡•ƒŽŽ‘™‡†–‘„‡†‡†—…–‡†‹†‡–‡”‹‹‰–ƒšƒ„Ž‡‹…‘‡ȋǡʹͲͳͺȌǤ

”‡ˆ‡””‡† •–‘…• ‹••—‡† ‹ –Š‡ Š‹Ž‹’’‹‡• ƒ”‡ ‰‡‡”ƒŽŽ› …——Žƒ–‹˜‡ǡ ‘˜‘–‹‰ǡ ƒ†

‘’ƒ”–‹…‹’ƒ–‹‰^ͻȋ‡”ƒ†‘ƒ”ƒ†ƒǡʹͲʹͳȌǤ

͹‘˜‡”–‹„Ž‡’”‡ˆ‡””‡†•–‘…•…ƒ„‡…‘˜‡”–‡†‹–‘…‘‘•–‘…•Ǥ

ͺŠ‡‹••—ƒ…‡‘ˆ…‘˜‡”–‹„Ž‡’”‡ˆ‡””‡†•–‘…‹•ƒŽŽ‘™‡†ˆ‘”‡”‰‡”•ƒ……‘—–‡†ˆ‘”—•‹‰–Š‡’‘‘Ž‹‰‡–Š‘†ǤŠ‹•

…ƒ‹…”‡ƒ•‡–Š‡‡ƒ”‹‰•ƒ˜ƒ‹Žƒ„Ž‡–‘…‘‘•–‘…Š‘Ž†‡”•ƒ•Ž‘‰ƒ•–Š‡ƒˆ–‡”Ǧ–ƒš‡ƒ”‹‰•‘ˆ–Š‡ƒ…“—‹”‡†ˆ‹”

ƒ”‡‰”‡ƒ–‡”–Šƒ–Š‡†‹˜‹†‡†•‘ˆ–Š‡‡™Ž›‹••—‡†…‘˜‡”–‹„Ž‡’”‡ˆ‡””‡†•–‘…•ǤŠ‹•‡ƒ”‹‰•ƒ†˜ƒ–ƒ‰‡…ƒ„‡

–‡’‘”ƒ”›‘”’‡”ƒ‡–†‡’‡†‹‰‘–Š‡…‘˜‡”•‹‘–‡”•ƒ†–Š‡’‘–‡–‹ƒŽ†‹Ž—–‹‘‹‡ƒ”‹‰•ƒ”‹•‹‰ˆ”‘

ˆ—–—”‡…‘˜‡”•‹‘ȋ‹…Š‡•ǡͳͻ͹ͲȌǤ†‡”–Š‡’‘‘Ž‹‰‡–Š‘†ǡƒ›‹‡†‹ƒ–‡‹…‘‡–ƒš’ƒ›‡–‘…ƒ’‹–ƒŽ

‰ƒ‹•…ƒ„‡ƒ˜‘‹†‡†ȋ‘Ž†‘ˆ•›ǡͳͻ͹ͳȌǤ

ͻƒ”–‹…‹’ƒ–‹‰’”‡ˆ‡””‡†•–‘…•ƒ›”‡…‡‹˜‡ƒ††‹–‹‘ƒŽ…ƒ•Š†‹˜‹†‡†•ǡ‘–‘’‘ˆ–Š‡ˆ‹š‡†”ƒ–‡•ǡ†—”‹‰‹’”‘˜‡†

…‘”’‘”ƒ–‡’‡”ˆ‘”ƒ…‡Ǥ

ͳͷʹ Voting preferred shares and corporate control: Impact on minority stockholders’ rights

3 Objectives of the Study

Š‹••–—†›Šƒ•–Š‡ˆ‘ŽŽ‘™‹‰‘„Œ‡…–‹˜‡•ǣ

ͳǤ ‘‹†‡–‹ˆ›–Š‡ˆ‡ƒ–—”‡•‘ˆ˜‘–‹‰’”‡ˆ‡””‡†•–‘…•‘ˆ•‡Ž‡…–‡†Ž‹•–‡†Š‹Ž‹’’‹‡…‘’ƒ‹‡•Ǥ ʹǤ ‘†‡–‡”‹‡–Š‡‡ˆˆ‡…–•‘ˆ˜‘–‹‰’”‡ˆ‡””‡†•–‘…•‘–Š‡”‹‰Š–•‘ˆ‹‘”‹–›•–‘…Š‘Ž†‡”•Ǥ

͵Ǥ ‘…‘‡—’™‹–Š”‡…‘‡†ƒ–‹‘•–Šƒ–™‹ŽŽ‹’”‘˜‡–Š‡’Ž‹‰Š–‘ˆ–Š‡‹‘”‹–›•–‘…Š‘Ž†‡”•

‹”‡Žƒ–‹‘–‘–Š‡‹••—ƒ…‡‘ˆ˜‘–‹‰’”‡ˆ‡””‡†•–‘…•Ǥ

4 Methodology

…‘†—…–‹‰–Š‹••–—†›ǡ–Š‡ˆ‘ŽŽ‘™‹‰’”‘…‡†—”‡•™‡”‡ƒ†‡ǣ

ͳǤ Š‡ʹͲͳͻƒ—ƒŽ”‡’‘”–•‘ˆ–Š‡͵ͲŽ‹•–‡†Š‹Ž‹’’‹‡…‘’ƒ‹‡•™Š‹…Š…‘’”‹•‡–Š‡Š‹Ž‹’’‹‡

•–‘…‹†‡šȋ‹Ȍ™‡”‡”‡˜‹‡™‡†–‘‹†‡–‹ˆ›™Š‹…Š…‘’ƒ‹‡•Šƒ˜‡‹••—‡†˜‘–‹‰’”‡ˆ‡””‡†

•–‘…•Ǥ

ʹǤ ‘–Š‡‡š–‡–’‘••‹„Ž‡ǡ–Š‡ˆ‘ŽŽ‘™‹‰’‹‡…‡•‘ˆ‹ˆ‘”ƒ–‹‘™‡”‡‰ƒ–Š‡”‡†ǣ†ƒ–‡•–Š‡˜‘–‹‰

’”‡ˆ‡””‡†•–‘…•™‡”‡‹••—‡†ǡ–‘™Š‘–Š‡•Šƒ”‡•™‡”‡‹••—‡†ǡƒ†–Š‡‹••—‡’”‹…‡•Ǥ

͵Ǥ ˆ–Š‡˜‘–‹‰’”‡ˆ‡””‡†•–‘…•™‡”‡‹••—‡†–‘…‘–”‘ŽŽ‹‰•–‘…Š‘Ž†‡”•ǡ–Š‡‹••—‡’”‹…‡•™‡”‡

…‘’ƒ”‡†™‹–Š–Š‡…‘‘•–‘…’”‹…‡•ƒ––Š‡–‹‡–Š‡˜‘–‹‰’”‡ˆ‡””‡†•–‘…•™‡”‡‹••—‡†Ǥ

Š‡†‹ˆˆ‡”‡…‡•„‡–™‡‡–Š‡–‘–ƒŽ’”‘…‡‡†•”ƒ‹•‡†ˆ”‘–Š‡‹••—ƒ…‡‘ˆ˜‘–‹‰’”‡ˆ‡””‡†•–‘…•

ƒ†–Š‡ƒ‘—––Šƒ–™‘—Ž†Šƒ˜‡„‡‡”ƒ‹•‡†Šƒ†…‘‘•–‘…•„‡‡‹••—‡†™‡”‡…‘’—–‡†Ǥ ͶǤ Š‡ƒ‡†‡†ƒ”–‹…Ž‡•‘ˆ‹…‘”’‘”ƒ–‹‘‘ˆ–Š‡…‘’ƒ‹‡•™Š‹…Š‹••—‡†˜‘–‹‰’”‡ˆ‡””‡†•–‘…•

™‡”‡”‡˜‹‡™‡†–‘‹†‡–‹ˆ›™Š‘†‡–‡”‹‡†–Š‡‹••—‡’”‹…‡•Ǥ

ͷǤ Š‡‡•–‹ƒ–‡†’‡”…‡–ƒ‰‡•Šƒ”‡•‘ˆ–Š‡˜‘–‹‰’”‡ˆ‡””‡†•–‘…•‘ˆ…‘–”‘ŽŽ‹‰•–‘…Š‘Ž†‡”•–‘

–Š‡ –‘–ƒŽ ˜‘–‹‰ •Šƒ”‡• ™‡”‡ …‘’—–‡† „ƒ•‡† ‘ –Š‡ ‹ˆ‘”ƒ–‹‘ ’”‘˜‹†‡† ‹ –Š‡ ƒ—ƒŽ

”‡’‘”–•–‘†‡–‡”‹‡–Š‡‡š–‡–‘ˆ–Š‡’‘••‹„Ž‡†‹Ž—–‹‘‘ˆ–Š‡‹‘”‹–›•–‘…Š‘Ž†‡”•ǡƒ•ƒ

”‡•—Ž–‘ˆ‹••—‹‰–Š‡•‡˜‘–‹‰’”‡ˆ‡””‡†•–‘…•Ǥ

͸Ǥ –—†‹‡•ƒ†ƒ…ƒ†‡‹…ƒ”–‹…Ž‡•ƒ„‘—–˜‘–‹‰’”‡ˆ‡””‡†•–‘…•‹‘–Š‡”…‘—–”‹‡•™‡”‡ƒƒŽ›œ‡†Ǥ

͹Ǥ ‡…‘‡†ƒ–‹‘• ‹–‡†‡† –‘ ‹’”‘˜‡ –Š‡ •‹–—ƒ–‹‘ ‘ˆ –Š‡ ‹‘”‹–› •–‘…Š‘Ž†‡”• ™‹–Š

”‡•’‡…––‘–Š‡‹••—ƒ…‡‘ˆ˜‘–‹‰’”‡ˆ‡””‡†•–‘…•™‡”‡’”‘˜‹†‡†Ǥ

5 Findings

—–‘ˆ–Š‡͵ͲǦ‹†‡š‡†•–‘…•ǡͳͳ™‡”‡‹†‡–‹ˆ‹‡†–‘Šƒ˜‡‹••—‡†˜‘–‹‰’”‡ˆ‡””‡†•–‘…•Ǥƒ„Ž‡

ͳ•Š‘™•–Š‡ƒ”‡–…ƒ’‹–ƒŽ‹œƒ–‹‘‘ˆ–Š‡•‡ͳͳ…‘’ƒ‹‡•™‹–Š–Š‡‹””‡•’‡…–‹˜‡™‡‹‰Š–•‹–Š‡‹ƒ•

‘ˆ‡…‡„‡”͵ͳǡʹͲͳͻȋ•‡‡ƒ„Ž‡ͳȌǤ

Table 1. Market Cap of 11 PSEi Companies Which Issued Voting Preferred Stocks (As of December 31, 2019)

Company Market Cap in PHP Weight in the Index

ͳ ›ƒŽƒ‘”’‘”ƒ–‹‘ȋȌ Ͷͻʹǡʹͷͻǡͻ͸͵ǡͺ͹͵ ͷǤͲͷΨ

ʹ ›ƒŽƒƒ†…ǤȋȌ ͸͹ͲǡͶͶͲǡ͹͹Ͷǡ͸ͺ͸ ͸ǤͺͺΨ

͵ ‹„ƒǡ…ǤȋȌ ͸ͻʹǡʹͷ͸ǡͷͳʹǡ͹͹ʹ ͹ǤͳͲΨ

Ͷ ‹”•–‡‘”’‘”ƒ–‹‘ȋ Ȍ ͺ͹ǡͳ͹ͻǡ͸ͶͷǡͶͲͳ ͲǤͺͻΨ

ͷ Ž‘„‡‡Ž‡…‘ǡ…ǤȋȌ ʹ͸ͻǡͲͺͲǡͻͺʹǡͳͶͲ ʹǤ͹͸Ψ

͸ ƒ’‹–ƒŽ‘Ž†‹‰• ͳͺʹǡ͵Ͷ͸ǡͲͶͷǡͳͺͻ ͳǤͺ͹Ψ

͹ –‡”ƒ–‹‘ƒŽ‘–ƒ‹‡”‡”‹ƒŽ‡”˜‹…‡•ǡ…ǤȋȌ ʹͷ͹ǡ͹͸ͷǡ͸͸Ͳǡͻͺͻ ʹǤ͸ͶΨ ͺ ‡‰ƒ™‘”Ž†‘”’‘”ƒ–‹‘ȋȌ ͳʹͻǡʹͲͻǡ͸ͷͶǡͲ͹͹ ͳǤ͵͵Ψ ͻ ‡–”‘ƒ…‹ˆ‹…˜‡•–‡–•‘”’ȋȌ ͳͲͻǡͺͷͻǡʹͳͲǡͺͷ͹ ͳǤͳ͵Ψ ͳͲ ‡…—”‹–›ƒ‘”’‘”ƒ–‹‘ȋȌ ͳͶ͸ǡͻͶͲǡͲͺʹǡͻ͸ͷ ͳǤͷͳΨ

ͳͳ ǡ…ǤȋȌ ʹͳ͵ǡͶ͸͵ǡͳͲͷǡ͹ͲͲ ʹǤͳͻΨ

‘–ƒŽ ͵ǡʹͷͲǡͺͲͳǡ͸͵ͺǡ͸Ͷ͹ ͵͵Ǥ͵ͶΨ

‘—”…‡ǣŠ‹Ž‹’’‹‡–‘…š…Šƒ‰‡

Arthur S. Cayanan ͳͷ͵

The 11 companies accounted for more than 33% of the PSEi’s market cap as of –Š‡‡†‘ˆʹͲͳͻǤ

5.1.1 Share of Voting Preferred Stocks to Total Voting Shares

ƒ•‡†‘–Š‡•‡ͳͳ…‘’ƒ‹‡•ǡ–Š‡’‡”…‡–ƒ‰‡•Šƒ”‡‘ˆ–Š‡˜‘–‹‰’”‡ˆ‡””‡†•Šƒ”‡•–‘–Š‡–‘–ƒŽ˜‘–‹‰

•Šƒ”‡•”ƒ‰‡†ˆ”‘ͳͲǤͷʹΨ–‘ͷ͹ǤͲ͵Ψƒ•‘ˆ–Š‡‡†‘ˆʹͲͳͻȋ•‡‡ƒ„Ž‡ʹȌǤ

Table 2. Percentage Share of Voting Preferred Stocks to Total Voting Shares (December 31, 2019)

Company % Share of Common

Stocks to Total Voting Shares

% Share of Pref.

Stocks to Total Voting Shares

ͳ ›ƒŽƒ‘”’‘”ƒ–‹‘ȋȌ ͹ͷǤͺͳΨ 24.19%

ʹ ›ƒŽƒƒ†…ǤȋȌ ͷ͵ǤͲͲΨ 47.00%

͵ ‹„ƒǡ…ǤȋȌ ͺͻǤͶͺΨ 10.52%

Ͷ ‹”•–‡‘”’‘”ƒ–‹‘ȋ Ȍ ͹ͳǤͲͺΨ 28.92%

ͷ Ž‘„‡‡Ž‡…‘ǡ…ǤȋȌ ͶͷǤ͸͸Ψ 54.34%

͸ ƒ’‹–ƒŽ‘Ž†‹‰• ͷͷǤʹ͸Ψ 44.74%

͹ –‡”ƒ–‹‘ƒŽ ‘–ƒ‹‡” ‡”‹ƒŽ ‡”˜‹…‡•ǡ …Ǥ

ȋȌ ͹ͶǤͳʹΨ 25.88%

ͺ ‡‰ƒ™‘”Ž†‘”’‘”ƒ–‹‘ȋȌ ͺͶǤ͵ͲΨ 15.70%

ͻ ‡–”‘ƒ…‹ˆ‹…˜‡•–‡–•‘”’ȋȌ ͹͹Ǥͷ͹Ψ 22.43%

ͳͲ ‡…—”‹–›ƒ‘”’‘”ƒ–‹‘ȋȌ ͶʹǤͻ͹Ψ 57.03%

ͳͳ ǡ…ǤȋȌ ͷͻǤͲʹΨ 40.98%

–‹•‹–‡”‡•–‹‰–‘‘–‡–Šƒ–ˆ‘”‘•–…‘’ƒ‹‡•™‹–Š„‹‰ƒ”‡–…ƒ’‹–ƒŽ‹œƒ–‹‘•—…Šƒ•ǡŽ‘„‡ǡ

ƒ†ǡ–Š‡’‡”…‡–ƒ‰‡•Šƒ”‡•‘ˆ–Š‡‹”˜‘–‹‰’”‡ˆ‡””‡†•–‘…•–‘–Š‡–‘–ƒŽ˜‘–‹‰•Šƒ”‡•™‡”‡ƒ–

Ž‡ƒ•–ͶͲΨǤ

Š‡‡š––ƒ„Ž‡•Š‘™•–Š‡‡•–‹ƒ–‡†’‡”…‡–ƒ‰‡•Šƒ”‡•‘ˆ–Š‡…‘–”‘ŽŽ‹‰•–‘…Š‘Ž†‡”•‘–Š‡˜‘–‹‰

•Šƒ”‡•‘ˆ–Š‡‹””‡•’‡…–‹˜‡…‘’ƒ‹‡•ȋ•‡‡ƒ„Ž‡͵ȌǤ

Table 3. Estimated Percentage Share of the Controlling Stockholders on Common Stocks, Voting Preferred Stocks, and Total Voting Shares (December 31, 2019)

Estimated Percentage Share of the

Controlling Stockholders on:

Company Common

Stocks Voting Pref.

Stocks Total Voting Shares

ͳ ›ƒŽƒ‘”’‘”ƒ–‹‘ȋȌ Ͷ͹ǤͶ͸Ψ ͺ͸ǤͻͶΨ ͷ͹ǤͲͳΨ

ʹ ›ƒŽƒƒ†…ǤȋȌ ͶͶǤͶʹΨ ͻ͵ǤͲͻΨ ͸͹Ǥ͵ͲΨ

͵ ‹„ƒǡ…ǤȋȌ ͷʹǤͻʹΨ ͳͲͲǤͲͲΨ ͷ͹Ǥͺ͹Ψ

Ͷ ‹”•–‡‘”’‘”ƒ–‹‘ȋ Ȍ ͸͹ǤͷͻΨ ͳͲͲǤͲͲΨ ͹͸Ǥͻ͸Ψ

ͷ Ž‘„‡‡Ž‡…‘ǡ…ǤȋȌ ͹͹Ǥͻ͵Ψ^ͳͲ ͳͲͲǤͲͲΨ ͺͻǤͻ͵Ψ^ͳͳ

͸ ƒ’‹–ƒŽ‘Ž†‹‰•ȋȌȌ ͷͷǤͻ͵Ψ ͻ͹ǤͺͳΨ ͹ͶǤ͸͹Ψ

͹ –‡”ƒ–‹‘ƒŽ ‘–ƒ‹‡” ‡”‹ƒŽ ‡”˜‹…‡•ǡ …Ǥ

ȋȌ ͶͻǤͳʹΨ ͳͲͲǤͲͲΨ ͸ʹǤʹͻΨ

ͺ ‡‰ƒ™‘”Ž†‘”’‘”ƒ–‹‘ȋȌ ͸͸ǤͲ͸Ψ ͳͲͲǤͲͲΨ ͹ͳǤ͵ͺΨ

ͻ ‡–”‘ƒ…‹ˆ‹…˜‡•–‡–•‘”’ȋȌ ͶͳǤͺͻΨ ͳͲͲǤͲͲΨ ͷͶǤͻʹΨ ͳͲ ‡…—”‹–›ƒ‘”’‘”ƒ–‹‘ȋȌ ͵͵ǤͶ͸Ψ ͸͸ǤͻʹΨ ͷʹǤͷͶΨ

ͳͳ ǡ…ǤȋȌ ʹʹǤͲ͵Ψ ͳͲͲǤͲͲΨ ͷ͵ǤͻͺΨ

ͳͲƒ•‡†‘–Š‡…‘„‹‡†…‘‘•Šƒ”‡•‘ˆƒ†‹‰–‡ŽǤ

ͳͳƒ•‡†‘–Š‡…‘„‹‡†‹–‡”‡•–‘ˆƒ†‹‰–‡ŽǤ

ͳͷͶ Voting preferred shares and corporate control: Impact on minority stockholders’ rights

–—•–„‡‘–‡†–Šƒ–‹•‹š‘—–‘ˆ–Š‡ͳͳ…‘’ƒ‹‡•ǡ–Š‡ƒŒ‘”‹–›•–‘…Š‘Ž†‡”•†‹†‘–Šƒ˜‡‘”‡

–ŠƒͷͲΨ‘ˆ–Š‡…‘‘•Šƒ”‡•Ǥ‘™‡˜‡”ǡ™Š‡–Š‡‹”•Šƒ”‡•‹–Š‡˜‘–‹‰’”‡ˆ‡””‡†•–‘…•™‡”‡

…‘„‹‡†ǡ–Š‡ƒŒ‘”‹–›•–‘…Š‘Ž†‡”•‘ˆ–Š‡•‡ͳͳ…‘’ƒ‹‡•‡†‡†—’Šƒ˜‹‰ƒ–Ž‡ƒ•–ͷͲΨ‘ˆ–Š‡˜‘–‹‰

•Šƒ”‡•ǡ™‹–Šˆ‹˜‡‘ˆ–Š‡Šƒ˜‹‰ƒ–Ž‡ƒ•––™‘Ǧ–Š‹”†•‘ˆƒŽŽ–Š‡˜‘–‹‰•Šƒ”‡•Ǥ

–—•–ƒŽ•‘„‡‘–‡†–Šƒ––Š‡…‘–”‘ŽŽ‹‰•–‘…Š‘Ž†‡”•Š‡Ž†ƒŒ‘”‹–›‘ˆ–Š‡˜‘–‹‰’”‡ˆ‡””‡†•Šƒ”‡•ǡ

•‡˜‡‘ˆ™Š‹…Š™‡”‡ͳͲͲΨ‘™‡†Ǥ ‘”–Š‡‘–Š‡”ˆ‘—”ǡ–Š‡Ž‘™‡•–‡•–‹ƒ–‡†’‡”…‡–ƒ‰‡•Šƒ”‡‘ˆ˜‘–‹‰

’”‡ˆ‡””‡†•–‘…•Š‡Ž†„›–Š‡…‘–”‘ŽŽ‹‰•–‘…Š‘Ž†‡”•™ƒ•͸͸ǤͻʹΨǤ

‹–Š‘—––Š‡˜‘–‹‰’”‡ˆ‡””‡†•–‘…•ǡ‘Ž›–™‘…‘’ƒ‹‡•ǡ ‹”•–‡‘”’‘”ƒ–‹‘ƒ†Ž‘„‡‡Ž‡…‘ǡ

Šƒ˜‡ƒ–Ž‡ƒ•––™‘Ǧ–Š‹”†•˜‘–‡‘ˆ–Š‡…‘‘•–‘…•Ǥ

–Š‡…ƒ•‡‘ˆŽ‘„‡‡Ž‡…‘ǡ–Š‡͹͹Ǥͻ͵Ψ‘™‡”•Š‹’•–ƒ‡‹‹–•…‘‘•–‘…•ƒ”‡‘™‡†„››ƒŽƒ

Corporation (30.90%) and Singapore Telecom, Int’l. Pte. Ltd. (Singtel) (47.03%). Asiacom Philippines,

…Ǥǡ‘™‡”‘ˆƒŽŽ–Š‡˜‘–‹‰’”‡ˆ‡””‡†•–‘…•‘ˆŽ‘„‡‡Ž‡…‘ǡ‹•ƒŒ‘‹–˜‡–—”‡‘ˆ›ƒŽƒ‘”’‘”ƒ–‹‘

(60%) and Singtel (40%) (Globe, 2020). However, in Note 1.1 of the 2019 Globe’s Notes to Financial Statements, the following disclosure was made: “Major stockholders of Globe Telecom include Ayala

‘”’‘”ƒ–‹‘ȋȌǡ‹‰ƒ’‘”‡‡Ž‡…‘–‡”ƒ–‹‘ƒŽ–‡–†Ǥȋ‹‰–‡ŽȌƒ†•‹ƒ…‘Š‹Ž‹’’‹‡•ǡ…Ǥ None of these companies exercise control over Globe Telecom.”ȋŽ‘„‡‡Ž‡…‘ǡ…ǤȋȌǡʹͲͳͻǡ’ǤͳͲȌ

Š‡˜‘–‹‰’”‡ˆ‡””‡†•–‘…•”‡’”‡•‡–‘”‡–ŠƒͷͲΨ‘ˆ–Š‡–‘–ƒŽ˜‘–‹‰•Šƒ”‡•Ǥƒ†‹‰–‡Žƒ”‡

–Š‡„‹‰‰‡•–…‘‘•–‘…Š‘Ž†‡”•‘ˆŽ‘„‡‡Ž‡…‘™‹–Šƒ…‘„‹‡†˜‘–‹‰•Šƒ”‡‘ˆ‘”‡–Šƒ͹͹Ψ

‹–Š‡…‘‘•–‘…•ƒ†ͳͲͲΨ‹–Š‡˜‘–‹‰’”‡ˆ‡””‡†•–‘…•ǤŠ‡‹”…‘„‹‡†–‘–ƒŽ˜‘–‹‰•Šƒ”‡•‹•

ͺͻǤͻ͵Ψȋ•‡‡ƒ„Ž‡͵ȌǤ

ƒ•‡†‘–Š‡†‹•…Ž‘•—”‡•ˆ‘—†‹–Š‡‹””‡•’‡…–‹˜‡ƒ—ƒŽ”‡’‘”–•ƒ†–Š‘•‡ˆ‹Ž‡†™‹–Šǡ›ƒŽƒ

‘”’‘”ƒ–‹‘ǡ›ƒŽƒƒ†…Ǥǡƒ†ƒ’‹–ƒŽ‘ˆˆ‡”‡†–Š‡‹”˜‘–‹‰’”‡ˆ‡””‡†•–‘…•–‘–Š‡‹”…‘‘

•–‘…Š‘Ž†‡”•ƒ•‘ˆƒ‰‹˜‡†ƒ–‡ǤŠ‹•‹’Ž‹‡•–Šƒ––Š‡’”‡‡’–‹˜‡”‹‰Š–•‘ˆ–Š‡‹”…‘‘•–‘…Š‘Ž†‡”•

™‡”‡…‘•‹†‡”‡†‹–Š‡•‡‘ˆˆ‡”‹‰•Ǥ‘–‡ǡŠ‘™‡˜‡”ǡ–Šƒ––Š‡’”‡‡’–‹˜‡”‹‰Š–‘ˆ•Šƒ”‡Š‘Ž†‡”•ƒ›„‡

†‡‹‡†‹…‡”–ƒ‹…ƒ•‡•Ǥ†‡”‡…–‹‘͵ͺ‘ˆ–Š‡‡˜‹•‡†‘”’‘”ƒ–‹‘‘†‡‘ˆ–Š‡Š‹Ž‹’’‹‡•ȋ’’ǤͳͻǦ 20), “the preemptive right shall not extend to shares i••—‡†‹…‘’Ž‹ƒ…‡™‹–ŠŽƒ™•”‡“—‹”‹‰•–‘…

‘ˆˆ‡”‹‰• ‘” ‹‹— •–‘… ‘™‡”•Š‹’ „› –Š‡ ’—„Ž‹…ǡ ‘” –‘ •Šƒ”‡• ‹••—‡† ‹ ‰‘‘† ˆƒ‹–Š ™‹–Š –Š‡

ƒ’’”‘˜ƒŽ ‘ˆ –Š‡ •–‘…Š‘Ž†‡”• ”‡’”‡•‡–‹‰ –™‘Ǧ–Š‹”†• ȋʹȀ͵Ȍ ‘ˆ –Š‡ ‘—–•–ƒ†‹‰ …ƒ’‹–ƒŽ •–‘…ǡ ‹

‡š…Šƒ‰‡ˆ‘”’”‘’‡”ty needed for corporate purposes or in payment of a previously contracted debt.”

Š‡ ˜‘–‹‰ ’”‡ˆ‡””‡† •–‘…• ˆ”‘ –Š‡•‡ –Š”‡‡ …‘’ƒ‹‡• ™‡”‡ ‘– Ž‹•–‡† ‹ –Š‡ Š‹Ž‹’’‹‡ –‘…

š…Šƒ‰‡Ǥ

Š‹Ž‡–Š‡”‡™‡”‡‘”—Ž‡•˜‹‘Žƒ–‡†‹–Š‡’”‘…‡••ǡ–Š‡‘ǦŽ‹•–‹‰‘ˆ–Š‡•‡˜‘–‹‰’”‡ˆ‡””‡†

•–‘…•‹‰Š–Šƒ˜‡ƒ†‡–Š‡—ƒ––”ƒ…–‹˜‡–‘‹˜‡•–‘”•„‡…ƒ—•‡‘ˆ’‘••‹„Ž‡†‹ˆˆ‹…—Ž–‹‡•‹Ž‹“—‹†ƒ–‹‰

–Š‡Ǥ Š‹• ’”‘„ƒ„Ž› ‡š’Žƒ‹• ™Š› –Š‡ •—„•…”‹’–‹‘ „› –Š‡ ‹‘”‹–› •–‘…Š‘Ž†‡”• ™ƒ• Ž‘™ƒ† –Š‡

—•—„•…”‹„‡†•Šƒ”‡•„›–Š‡Žƒ––‡”•‡‡‡†–‘Šƒ˜‡„‡‡–ƒ‡—’„›–Š‡ƒŒ‘”‹–›•–‘…Š‘Ž†‡”•ǤŠ‹•

also possibly explains the much higher percentage share of the controlling stockholders’ interest in the

˜‘–‹‰’”‡ˆ‡””‡†•–‘…•˜‹•ǦǦ˜‹•–Š‡‹”‹–‡”‡•–‹…‘‘•–‘…•ȋ•‡‡ƒ„Ž‡͵ˆ‘”ǡǡƒ†ȌǤ

–Š‡…ƒ•‡‘ˆ‡…—”‹–›ƒǡ–Š‡͸Ͳʹǡͺ͵ͳǡͳͲͻ˜‘–‹‰’”‡ˆ‡””‡†•–‘…•‹••—‡†‘—Ž›ͳͲǡʹͲͳͶǡƒŽ•‘

…‘•‹†‡”‡† –Š‡ ’”‡‡’–‹˜‡ ”‹‰Š–• ‘ˆ ‹–• …‘‘ •–‘…Š‘Ž†‡”• ƒ• ‘ˆ —‡ ͳ͸ǡ ʹͲͳͶ ȋ‡…—”‹–› ƒ

‘”’‘”ƒ–‹‘ǡʹͲͳͶǡ’”‹ŽͺȌǤŠ‡”‡ƒ‹‹‰͵ͻ͹ǡͳ͸ͺǡͺͻͳ˜‘–‹‰’”‡ˆ‡””‡†•Šƒ”‡•™‡”‡‹••—‡†‘’”‹Ž

ͳǡʹͲͳ͸ǡ–‘Š‡ƒ‘ˆ‘›‘Ǧ‹–•—„‹•Š‹ ǡ–†ǤȋȌǡ ”‡†‡”‹…›ǡƒ†ƒ‹‡Ž›–Š”‘—‰Šƒ

’”‹˜ƒ–‡’Žƒ…‡‡–ȋ‡…—”‹–›ƒ‘”’‘”ƒ–‹‘ǡʹͲͳ͸ȌǤ‹‡‘–Š‡”˜‘–‹‰’”‡ˆ‡””‡†•Šƒ”‡•ǡ–Š‡•‡˜‘–‹‰

’”‡ˆ‡””‡†•–‘…•ƒ”‡‘–Ž‹•–‡†Ǥ

Out of these 11, only Globe’s voting preferred stocks were listed in PSE. However, the shares had

‡˜‡”„‡‡–”ƒ†‡†„‡…ƒ—•‡ƒŽŽ–Š‡•Šƒ”‡•™‡”‡Š‡Ž†„›•‹ƒ…‘Ǥ 5.1.2 Cost of Voting Preferred Stocks

‹–Š–Š‡•‹‰‹ˆ‹…ƒ–˜‘–‹‰”‹‰Š–•ƒ••‹‰‡†–‘–Š‡•‡’”‡ˆ‡””‡†•–‘…•ǡ‹–‹•‹–‡”‡•–‹‰–‘‘™Š‘™

—…Š–Š‡…‘–”‘ŽŽ‹‰•–‘…Š‘Ž†‡”•’ƒ‹†ˆ‘”–Š‡•‡•Šƒ”‡•Ǥƒ„Ž‡Ͷ’”‘˜‹†‡•ƒ•—ƒ”›‘ˆ–Š‡ƒ‘—–

’ƒ‹†„›–Š‡…‘–”‘ŽŽ‹‰•–‘…Š‘Ž†‡”•ˆ‘”–Š‡‹”’”‡ˆ‡””‡†•–‘…•ƒ†–Š‡ƒ‘—––Šƒ––Š‡›™‘—Ž†Šƒ˜‡

’ƒ‹†Šƒ†…‘‘•Šƒ”‡•„‡‡•—„•…”‹„‡†ƒ––Š‡’”‡˜ƒ‹Ž‹‰…‘‘•–‘…’”‹…‡•ƒ––Š‡–‹‡–Š‡•‡

˜‘–‹‰’”‡ˆ‡””‡†•Šƒ”‡•™‡”‡ˆŽ‘ƒ–‡†Ǥƒ„Ž‡Ͷ’”‘˜‹†‡•‹ˆ‘”ƒ–‹‘ˆ‘”–Š‡˜‘–‹‰’”‡ˆ‡””‡†•–‘…•

™Š‹…Š™‡”‡•—„•…”‹„‡†‡–‹”‡Ž›„›–Š‡…‘–”‘ŽŽ‹‰•–‘…Š‘Ž†‡”•Ǥ

Arthur S. Cayanan ͳͷͷ Table 4. Amount Paid by the Controlling Stockholders for their Voting Preferred Stocks (in PHP)

Amount Paid for Voting Pref.

Stocks

Amount That Would Have Been Paid for Common

Stocks

Difference

ͳ ‹„ƒǡ…ǤȋȌ ͷǡͳͷͲǡͲͲͲǡͲͲͲ ͳ͸ǡͷͷ͹ǡʹͷͲǡͲͲͲ ͳͳǡͶͲ͹ǡʹͷͲǡͲͲͲ ʹ Ž‘„‡‡Ž‡…‘ǡ…ǤȋȌ ͹ͻʹǡͷ͹ͷǡͳͲͷ ͺͺǡͳ͵Ͷǡ͵ͷͳǡ͸͹͸ ͺ͹ǡ͵Ͷͳǡ͹͹͸ǡͷ͹ͳ

͵ –‡”ƒ–‹‘ƒŽ‘–ƒ‹‡”‡”‹ƒŽ

‡”˜‹…‡•ǡ…ǤȋȌ ͹ǡͲͲͲǡͲͲͲ ͵ͳǡͷ͹ͲǡͲͲͲǡͲͲͲ ͵ͳǡͷ͸͵ǡͲͲͲǡͲͲͲ Ͷ ‡‰ƒ™‘”Ž†‘”’‘”ƒ–‹‘ȋȌ ͸ͲǡͲͲͲǡͲͲͲ ʹͶǡͲͲͲǡͲͲͲǡͲͲͲ ʹ͵ǡͻͶͲǡͲͲͲǡͲͲͲ ͷ ‡–”‘ƒ…‹ˆ‹…˜‡•–‡–•‘”’ȋȌ ͻͳǡʹͺͳǡͲͷ͵ ͷ͵ǡʹʹ͹ǡ͵ͷͲǡͺ͸ͳ ͷ͵ǡͳ͵͸ǡͲ͸ͻǡͺͲͺ

͸ ‡…—”‹–›ƒ‘”’‘”ƒ–‹‘ȋȌ ͵ͻǡ͹ͳ͸ǡͺͺͻ ͸͸ǡʹ͸͵ǡ͸ͷ͹ǡ͹͹Ͷ ͸͸ǡʹʹ͵ǡͻͶͲǡͺͺͷ

͹ ǡ…ǤȋȌ ͳͷͲǡͲͲͲǡͲͲͲ ͶͲʹǡ͹ͷͲǡͲͲͲǡͲͲͲ ͶͲʹǡ͸ͲͲǡͲͲͲǡͲͲͲ ƒ„Ž‡Ͷ•Š‘™•–Š‡•‹‰‹ˆ‹…ƒ–†‹•…”‡’ƒ…›‹–Š‡ƒ‘—–•’ƒ‹†ˆ‘”–Š‡˜‘–‹‰’”‡ˆ‡””‡†•–‘…•ƒ†

…‘‘ •–‘…• ƒ••—‹‰ –Š‡ Žƒ––‡” ™‡”‡ •—„•…”‹„‡† –‘ ‡ƒ” ‡“—‹˜ƒŽ‡– ˜‘–‹‰ ”‹‰Š–•Ǥ Š‹Ž‡ –Š‡

ˆ‡ƒ–—”‡•‘ˆ…‘‘•–‘…•ƒ”‡†‹ˆˆ‡”‡–ˆ”‘–Š‘•‡‘ˆ–Š‡˜‘–‹‰’”‡ˆ‡””‡†•–‘…•ǡ–Š‡†‹ˆˆ‡”‡…‡‹

•—„•…”‹’–‹‘’”‹…‡•™‡”‡——•—ƒŽŽ›„‹‰…‘•‹†‡”‹‰–Š‡…‘–”‘Ž”‹‰Š–•–Šƒ––Š‡•‡ƒŒ‘”‹–›•–‘…Š‘Ž†‡”•

‰ƒ‹ ˆ”‘ –Š‡•‡ ‹••—‡•Ǥ  ‡šƒ‹ƒ–‹‘ ‘ˆ –Š‡ ƒ‡†‡† ƒ”–‹…Ž‡• ‘ˆ ‹…‘”’‘”ƒ–‹‘ ȋȌ ‘ˆ –Š‡ ͳͳ …‘’ƒ‹‡•™Š‹…Š‹••—‡†’”‡ˆ‡””‡†•–‘…•ǡ–Š‡‹””‡•’‡…–‹˜‡„‘ƒ”†‘ˆ†‹”‡…–‘”•†‡…‹†‡†‘–Š‡‹••—‡

˜ƒŽ—‡‘”‹••—‡’”‹…‡ǡ‡š…‡’–ˆ‘”–Š‡ˆ‘ŽŽ‘™‹‰…‘’ƒ‹‡•™Š‡”‡–Š‡‹””‡•’‡…–‹˜‡•™‡”‡•‹Ž‡–ƒ„‘—–

™Š‘†‡–‡”‹‡†–Š‡‹••—‡’”‹…‡ǣ ǡŽ‘„‡ǡƒ†Ǥ^ͳʹŠ‡‹””‡•’‡…–‹˜‡„‘ƒ”†•ǡŠ‘™‡˜‡”ǡ†‡…‹†‡‘

–Š‡ †‹˜‹†‡† ”ƒ–‡•Ǥ Ž•‘ǡ –Š‡”‡ ™‡”‡ ‘ †‹•…Ž‘•—”‡• ‘ –Š‡ „ƒ•‹• ‘ˆ –Š‡ ‹••—‡ ’”‹…‡• ‘ˆ –Š‡ ˜‘–‹‰

’”‡ˆ‡””‡†•–‘…•™Š‡–Š‡›™‡”‡‹••—‡†Ǥ

ƒ‡–Š‡…ƒ•‡‘ˆǤ…–‘„‡”ͳ͸ǡʹͲͳʹǡ‹••—‡†ͳͷͲ‹ŽŽ‹‘˜‘–‹‰’”‡ˆ‡””‡†•Šƒ”‡•–‘

‘Ž†‹‰•ǡ…Ǥȋ Ȍǡ–Š‡„‡‡ˆ‹…‹ƒŽ–”—•–ˆ—†‘ˆǡƒ–ͳ’‡”•Šƒ”‡ǡ‘”ƒ–‘–ƒŽ‘ˆͳͷͲ

‹ŽŽ‹‘ǤŠ‡•‡˜‘–‹‰’”‡ˆ‡””‡†•Šƒ”‡•ƒ……‘—–‡†ˆ‘”ͶͲǤͻͺΨ‘ˆ–Š‡–‘–ƒŽ˜‘–‹‰•Šƒ”‡•ǤŠ‡’”‡˜ƒ‹Ž‹‰

’”‹…‡‘ˆ…‘‘•–‘…ƒ––Šƒ––‹‡™ƒ•ʹǡͷ͹ͺǤŠ‹•‡ƒ•–Šƒ– ™‘—Ž†Šƒ˜‡’ƒ‹†

ͶͲʹǤ͹ͷ „‹ŽŽ‹‘ ˆ‘” –Š‡ ‡“—‹˜ƒŽ‡– ˜‘–‹‰ ”‹‰Š–• Šƒ† ‹– •—„•…”‹„‡† –‘ –Š‡…‘‘ •–‘…•Ǥ Š‡•‡

•Šƒ”‡•™‡”‡‹••—‡†–‘ƒ††”‡••–Š‡ˆ‘”‡‹‰‘™‡”•Š‹’…‘…‡””ƒ‹•‡†ƒ‰ƒ‹•––Š‡…‘’ƒ›„›‹Ž•‘

ƒ„‘ƒ‘ ‡„”—ƒ”›ʹͺǡʹͲͲ͹ǡƒ†™ƒ•†‡…‹†‡†„›–Š‡—’”‡‡‘—”–‘—‡ʹͺǡʹͲͳͳǤ^ͳ͵

–Š‡…ƒ•‡‘ˆ ‹”•–‡ǡ–Š‡ͳ„‹ŽŽ‹‘˜‘–‹‰’”‡ˆ‡””‡†•–‘…•™‡”‡–Š‡”‡•—Ž–•‘ˆƒʹͲͲǣͳ•–‘…•’Ž‹–

ƒ†”‡…Žƒ••‹ˆ‹…ƒ–‹‘‘ˆ‡š‹•–‹‰‘˜‘–‹‰ͳͲͲ’ƒ”˜ƒŽ—‡ͷ‹ŽŽ‹‘’”‡ˆ‡””‡†•–‘…•‹–‘ͳ„‹ŽŽ‹‘

ͲǤͷͲ˜‘–‹‰’”‡ˆ‡””‡†•–‘…•‘—‰—•–ͳ͹ǡʹͲͲͷǡ‡˜‡„‡ˆ‘”‡–Š‡ …‘‘•Šƒ”‡•™‡”‡Ž‹•–‡†

ƒ–‘ ‡„”—ƒ”›ͳͲǡʹͲͲ͸Ǥ^ͳͶ ƒ•‡† ‘ –Š‡ ‘”‹‰‹ƒŽ ‹••—‡ ’”‹…‡ ‘ˆ –Š‡•‡ ”‡…Žƒ••‹ˆ‹‡† ’”‡ˆ‡””‡†

•–‘…•ǡ–Š‡…‘–”‘ŽŽ‹‰•–‘…Š‘Ž†‡”•’ƒ‹†ͷͲͲ‹ŽŽ‹‘ȋͷ‹ŽŽ‹‘šͳͲͲ’ƒ”˜ƒŽ—‡ƒ†‹••—‡

’”‹…‡ȌǤ

Š‡•—„•‡“—‡–‹••—ƒ…‡•‘ˆ˜‘–‹‰’”‡ˆ‡””‡†•–‘…•„› ™‡”‡–Š‡”‡•—Ž–•‘ˆ•–‘…†‹˜‹†‡†•Ǥ

…–‘„‡”ͷǡʹͲͲͻǡ–Š‡„‘ƒ”†‘ˆ†‹”‡…–‘”•†‡…Žƒ”‡†͵͹ͷ‹ŽŽ‹‘‡”‹‡•˜‘–‹‰’”‡ˆ‡””‡†•–‘…•ƒ•

•–‘…†‹˜‹†‡†•–‘‘˜‘–‹‰’”‡ˆ‡””‡†•–‘…•‡”‹‡•Ǥƒ”…ŠͺǡʹͲͳͲǡ–Š‡„‘ƒ”††‡…Žƒ”‡†ʹͷΨ

•–‘…†‹˜‹†‡†•–‘‡”‹‡•‘”‡“—‹˜ƒŽ‡––‘ͻ͵ǡͷͷ͵ǡͺͻʹ•Šƒ”‡•Ǥ ‘”–Š‡•‡˜‘–‹‰’”‡ˆ‡””‡†•Šƒ”‡•ǡ–Š‡”‡

™‡”‡‘…ƒ•Š‘—–Žƒ›•ˆ”‘–Š‡…‘–”‘ŽŽ‹‰•–‘…Š‘Ž†‡”•Ǥƒ†–Š‡…‘–”‘ŽŽ‹‰•–‘…Š‘Ž†‡”••—„•…”‹„‡†

–‘…‘‘•Šƒ”‡•™‹–Š–Š‡‡“—‹˜ƒŽ‡–˜‘–‹‰”‹‰Š–•ǡ–Š‡›•Š‘—Ž†Šƒ˜‡’ƒ‹†‘”‡–ŠƒͶǤ͸ͷ„‹ŽŽ‹‘Ǥ

Š‡•‡ …‘…‡”• ”‡Žƒ–‡† –‘ –Š‡ ‹••—ƒ…‡ ‘ˆ –Š‡•‡ ˜‘–‹‰ ’”‡ˆ‡””‡† •–‘…• …‘—Ž† Šƒ˜‡ „‡‡ ƒ

‘’’‘”–—‹–› ˆ‘” –Š‡ ‹†‡’‡†‡– †‹”‡…–‘”• –‘ ’”‘–‡…– –Š‡ ”‹‰Š–• ‘ˆ –Š‡ ‹‘”‹–› •–‘…Š‘Ž†‡”•Ǥ^ͳͷ

ͳʹ‡–ƒ‹Ž•”‡‰ƒ”†‹‰–Š‡Ž‹•–‘–Š‡ƒ‡†‡†ƒ”–‹…Ž‡•‘ˆ‹…‘”’‘”ƒ–‹‘ƒ”‡’”‘˜‹†‡†‹–Š‡”‡ˆ‡”‡…‡•Ǥ

ͳ͵Š––’•ǣȀȀ™™™Ǥ’”‘Œ‡…–Œ—”‹•’”—†‡…‡Ǥ…‘ȀʹͲͳ͹ȀͲͷȀ‰ƒ„‘ƒǦ˜Ǧ–‡˜‡•Ǧ‰”Ǧ‘Ǧͳ͹͸ͷ͹ͻǦŒ—‡ǦʹͺǦʹͲͳͳǤŠ–ŽǤ

Š‡…ƒ•‡‹•ƒ„‘—––Š‡•ƒŽ‡‘ˆ•Šƒ”‡•ǡƒ•–‘…Š‘Ž†‡”‘ˆǡ–‘ ‹”•–ƒ…‹ˆ‹…™Š‹…Š”‡•—Ž–‡†‹–Š‡˜‹‘Žƒ–‹‘‘ˆ

ͶͲ؏ƒš‹—‘™‡”•Š‹’”—Ž‡„›ƒˆ‘”‡‹‰‡–‹–›‹ƒŽ‘…ƒŽ–‡Ž‡…‘…‘’ƒ›Ǥ

ͳͶʹͲͲ͸ —ƒŽ‡’‘”–Ǥ

ͳͷŠ‡ƒ—–Š‘”‹•‘–ƒ™ƒ”‡‘ˆ–Š‡’‘•‹–‹‘•–Š‡”‡•’‡…–‹˜‡‹†‡’‡†‡–†‹”‡…–‘”•‘ˆ–Š‡”‡Ž‡˜ƒ–…‘’ƒ‹‡•–‘‘

‘–Š‡‹••—ƒ…‡‘ˆ˜‘–‹‰’”‡ˆ‡””‡†•–‘…•Ǥ

ͳͷ͸ Voting preferred shares and corporate control: Impact on minority stockholders’ rights

ˆ‘”–—ƒ–‡Ž›ǡ–Š‡‹—–‡•”‡Žƒ–‡†–‘–Š‡„‘ƒ”†‡‡–‹‰•™Š‡”‡†‡…‹•‹‘•‘–Š‡‹••—ƒ…‡‘ˆ–Š‡•‡

•Šƒ”‡•‘ˆ•–‘…•‘”ƒ›‘–Š‡”…‘…‡”•ƒˆˆ‡…–‹‰–Š‡‹–‡”‡•–•‘ˆ–Š‡‹‘”‹–›•–‘…Š‘Ž†‡”•ƒ”‡‘–

”‡“—‹”‡† †‹•…Ž‘•—”‡•Ǥ ‡…‡ǡ –Š‡ ‹˜‡•–‹‰ ’—„Ž‹… ‹• —ƒ™ƒ”‡ ƒ• –‘ Š‘™ –Š‡ ‹†‡’‡†‡– †‹”‡…–‘”•

˜‘–‡†Ǥ

5.1.3 Features of Voting Preferred Stocks

ƒ„Ž‡ͷ’”‘˜‹†‡•ƒ•—ƒ”›‘ˆ–Š‡ˆ‡ƒ–—”‡•‘ˆ–Š‡˜‘–‹‰’”‡ˆ‡””‡†•–‘…•‘ˆ–Š‡ͳͳ…‘’ƒ‹‡•

…‘˜‡”‡†‹–Š‹••–—†›Ǥ

Table 5. Features of the Voting Preferred Stocks (As of December 31, 2019)

Name of Company Par Value Dividend Rate Cumulative Redeemable Participating Convertible 1 Ayala Corporation PHP1.00 5.773% repriced

every 3 yrs. ✓ ✓ No

disclosure No disclosure 2 Ayala Land, Inc. PHP0.10 4.75% repriced

every 10 years. X ✓ No

disclosure ✓

3 BDO Unibank, Inc. PHP10 6.50% X No

disclosure X ✓

4 First Gen Corporation:

Series B PHP0.50 PHP0.02 ✓ ✓ X X

First Gen Corporation:

Series F PHP0.50 PHP0.01 No

disclosure ✓ X X

5 Globe Telecom PHP5.00 PHP0.01 ✓ ✓ X ✓

6 GT Capital Holdings PHP0.10 PHP0.00377 repriced every

10 years.

X ✓ X X

7 International Container

Terminal Services, Inc. PHP0.01 No dividend. N/A ✓ N/A X

8 Megaworld Corporation PHP.01 1% ✓ X X X

9 Metro Pacific Investments

Corp. PHP0.01 10% ✓ No

disclosure X No

disclosure

10 PLDT, Inc. PHP1.00 6.50% ✓ ✓ No

disclosure X

11 Security Bank Corporation PHP0.10 3.9% repriced

every 10 years. X ✓ X X

••Š‘™‹ƒ„Ž‡ͷǡ‘Ž›˜‘–‹‰’”‡ˆ‡””‡†•–‘…‹•‘–’ƒ›‹‰…ƒ•Š†‹˜‹†‡†•Ǥ‘‡‘ˆ–Š‡˜‘–‹‰

’”‡ˆ‡””‡†•–‘…•‹–Š‹••–—†›Šƒ˜‡„‡‡†‹•…Ž‘•‡†–‘„‡’ƒ”–‹…‹’ƒ–‹‰Ǥ ‘—”‘ˆ–Š‡ͳͲ…‘’ƒ‹‡•™Š‹…Š

†‡…Žƒ”‡…ƒ•Š†‹˜‹†‡†•ƒ”‡‘…——Žƒ–‹˜‡Ǥǡǡƒ†Ž‘„‡˜‘–‹‰’”‡ˆ‡””‡†•–‘…•ƒ”‡…‘˜‡”–‹„Ž‡

–‘…‘‘•–‘…•Ǥ

Š‹Ž‡ –Š‡ ˆ‡ƒ–—”‡• ‘ˆ –Š‡ …‘‘ •–‘…• ƒ”‡ •—„•–ƒ–‹ƒŽŽ› †‹ˆˆ‡”‡– ˆ”‘ –Š‘•‡ ‘ˆ –Š‡ ˜‘–‹‰

’”‡ˆ‡””‡†•–‘…•ǡ–Š‡Žƒ––‡”•‹‰‹ˆ‹…ƒ–Ž›†‹Ž—–‡–Š‡˜‘–‹‰”‹‰Š–•‘ˆ–Š‡‹‘”‹–›•–‘…Š‘Ž†‡”•Ǥˆ–Š‡

˜‘–‹‰’”‡ˆ‡””‡†•–‘…•ƒ”‡‘’ƒ”–‹…‹’ƒ–‹‰ƒ†‘…‘˜‡”–‹„Ž‡ǡ–Š‡…‘‘•–‘…Š‘Ž†‡”•ƒ›‡Œ‘›

‘”‡’‘–‡–‹ƒŽˆ‹ƒ…‹ƒŽ„‡‡ˆ‹–•‹–Š‡ˆ‘”‘ˆŠ‹‰Š‡”…ƒ•Š†‹˜‹†‡†•Ǥ‘™‡˜‡”ǡƒ”‡–Š‡•‡‹ˆ‡”‹‘”…ƒ•Š

ˆŽ‘™”‹‰Š–••—ˆˆ‹…‹‡––‘…‘’‡•ƒ–‡ˆ‘”–Š‡Š—‰‡†‹•…‘—––Š‡…‘–”‘ŽŽ‹‰•–‘…Š‘Ž†‡”•’ƒ‹†ˆ‘”–Š‡

…‘–”‘Ž”‹‰Š–•–Š‡›‡ƒ”‡†™Š‡–Š‡›•—„•…”‹„‡†–‘–Š‡˜‘–‹‰’”‡ˆ‡””‡†•–‘…•ǫ‘”‡‹–‡”‡•–‹‰

question to ask is, “Are the controlling stockholders willing to trade their voting preferred stocks to minority stockholders for the same price they paid?” If their answer is no, then the iss—ƒ…‡‘ˆ–Š‡•‡

˜‘–‹‰’”‡ˆ‡””‡†•–‘…•‹•ƒ…Ž‡ƒ”‡šƒ’Ž‡‘ˆ‡š’”‘’”‹ƒ–‹‰‹‘”‹–›•–‘…Š‘Ž†‡”•Ǥ

6 Concluding Remarks and Recommendations

– ‹• ‹–‡”‡•–‹‰ –‘ ‘™ ™Š‡ –Š‡•‡ ˜‘–‹‰ ’”‡ˆ‡””‡† •–‘…• •–ƒ”–‡† ˆŽ‘ƒ–‹‰ ƒ‘‰ –Š‡ Ž‹•–‡†

Š‹Ž‹’’‹‡…‘’ƒ‹‡•ǤƒŒ‘”ƒ––”‹„—–‡‘ˆƒ…‘‘•–‘…‹•‹–•˜‘–‹‰”‹‰Š–•Ǥ‘‡…‘’ƒ‹‡•’ƒ›ƒ

’”‡‹—–‘Šƒ˜‡ƒŒ‘”‹–›‘ˆ–Š‡•‡•–‘…•‘”•‘‡–‹‡•‡˜‡Œ—•–‡‘—‰Š–‘Šƒ˜‡ƒ”‡’”‡•‡–ƒ–‹‘‹

–Š‡„‘ƒ”†ǤŠƒ–Šƒ’’‡•™Š‡ƒ’”‡ˆ‡””‡†•–‘…‹•‹••—‡†™‹–Š˜‘–‹‰”‹‰Š–•ƒ–ƒ†‹•…‘—–ǫ‘”•‡ǡ

Arthur S. Cayanan ͳͷ͹

™Šƒ–‹ˆ–Š‹•˜‘–‹‰’”‡ˆ‡””‡†•–‘…‹•ƒŽ•‘…‘˜‡”–‹„Ž‡‹–‘…‘‘•–‘…•ƒ†‹••—‡†ƒ–ƒ†‹•…‘—–ǫ

Š‡‹••—ƒ…‡‘ˆ–Š‹•‹†‘ˆ˜‘–‹‰’”‡ˆ‡””‡†•–‘…‹•ƒ…Ž‡ƒ”ƒ‹ˆ‡•–ƒ–‹‘‘ˆ‡š’”‘’”‹ƒ–‹‰‹‘”‹–›

•–‘…Š‘Ž†‡”•ǤŠ‹•™‹ŽŽ‘–„‡ƒ’”‘„Ž‡‹ˆ–Š‡’”‹…‡’ƒ‹†„›–Š‡•—„•…”‹„‡”•‹•ˆƒ‹”Ǥ‘™‡˜‡”ǡƒ••Š‘™

‹ –Š‡ ˆ‹†‹‰• ‘ˆ –Š‹• •–—†›ǡ –Š‡ …‘–”‘ŽŽ‹‰ •–‘…Š‘Ž†‡”• ™Š‘ ƒŽ•‘ •—„•…”‹„‡† –‘ –Š‡ •Šƒ”‡• ™‡”‡

”‡•’‘•‹„Ž‡ˆ‘”•‡––‹‰–Š‡‹••—‡’”‹…‡–Š”‘—‰Š–Š‡‡„‡”•‘ˆ–Š‡„‘ƒ”†™Š‘–Š‡›‘‹ƒ–‡†ƒ†

‡Ž‡…–‡†ǤŠ‡”‡™‡”‡‘ˆƒ‹”‡••˜ƒŽ—ƒ–‹‘”‡’‘”–•†‹•…Ž‘•‡†–‘ƒ……‘’ƒ›–Š‡•‡‹••—ƒ…‡•ǤŠ‡”‡™‡”‡

ƒ ˆ‡™ ‘……ƒ•‹‘• ™Š‡”‡ –Š‡ ‹••—ƒ…‡ ‘ˆ –Š‡•‡ ˜‘–‹‰ ’”‡ˆ‡””‡† •–‘…• ™ƒ• ‘ˆˆ‡”‡† –‘ –Š‡ ‹‘”‹–›Ǥ

‘™‡˜‡”ǡ–Š‡‘ǦŽ‹•–‹‰‘ˆ–Š‡•‡‹••—‡•ƒ––Š‡•‡‡–‘Šƒ˜‡†‹•…‘—”ƒ‰‡†‹‘”‹–›•–‘…Š‘Ž†‡”•

ˆ”‘•—„•…”‹„‹‰Ǥ

˜‹‡™‘ˆ–Š‡ƒ„‘˜‡ƒ”‰—‡–•ǡ–Š‡ˆ‘ŽŽ‘™‹‰”‡…‘‡†ƒ–‹‘•ƒ”‡’”‘’‘•‡†Ǥ

ͳǤ š…‡’– ‹ …ƒ•‡• ™Š‡”‡ –Š‡ ’”‡‡’–‹˜‡ ”‹‰Š– ‘ˆ •Šƒ”‡Š‘Ž†‡”• ‹• †‡‹‡† —†‡” –Š‡ Žƒ™ǡ –Š‡

‹••—ƒ…‡‘ˆ˜‘–‹‰’”‡ˆ‡””‡†•–‘…•—•–„‡‘ˆˆ‡”‡†–‘ƒŽŽ…‘‘•–‘…Š‘Ž†‡”•ƒ•‘ˆƒ‰‹˜‡

†ƒ–‡ǡƒ†‹…ƒ•‡‘ˆ™ƒ‹˜‡”„›–Š‡‡š‹•–‹‰…‘‘•Šƒ”‡Š‘Ž†‡”•‘ˆ–Š‡‹”’”‡‡’–‹˜‡”‹‰Š–ǡ–Š‡

•Š‘—Ž†•–”‹…–Ž›…Š‡…–Š‡˜ƒŽ‹†‹–›‘ˆ•—…Š™ƒ‹˜‡”•ǤŠ‹•ƒ›‡–ƒ‹Ž•—„‹••‹‘‘ˆƒ††‹–‹‘ƒŽ

documents aside from the usual secretary’s certificate on denial of preemptive right.^ͳ͸

ʹǤ ‘‡…‘—”ƒ‰‡•ƒŽŽ‹˜‡•–‘”•–‘•—„•…”‹„‡ǡ–Š‡˜‘–‹‰’”‡ˆ‡””‡†•–‘…•—•–„‡Ž‹•–‡†ƒ––Š‡

Ǥ–’”‡•‡–ǡ–Š‡”‡ƒ”‡‘”—Ž‡•ˆ”‘ƒ†–Šƒ–”‡“—‹”‡–Š‡ƒ†ƒ–‘”›Ž‹•–‹‰‘ˆ

–Š‡•‡ •Šƒ”‡•Ǥ ‹˜‡ –Š‡ ‡š’Ž‘‹–ƒ–‹˜‡ ƒ–—”‡ ‘ˆ –Š‡•‡ ‹••—‡• ƒ• †‹•…—••‡† ‹ –Š‹• •–—†›ǡ ‹– ‹•

•—‰‰‡•–‡†–Šƒ––Š‡”‡‰—Žƒ–‘”•…‘•‹†‡”–Š‡ƒ†ƒ–‘”›Ž‹•–‹‰‘ˆ–Š‹•…Žƒ••‘ˆ•Šƒ”‡•Ǥ

͵Ǥ Š‡ ƒ’’”‘˜ƒŽ ‘ˆ–Š‡ ‹‘”‹–› •–‘…Š‘Ž†‡”• —•– „‡ ”‡“—‹”‡† ‹ –Š‡ ˆŽ‘–ƒ–‹‘‘ˆ–Š‡˜‘–‹‰

’”‡ˆ‡””‡† •–‘…• –‘ ’”‡˜‡– …‘–”‘ŽŽ‹‰ •–‘…Š‘Ž†‡”• ˆ”‘ Šƒ˜‹‰ ƒ„•‘Ž—–‡ ƒ—–Š‘”‹–›

”‡‰ƒ”†‹‰–Š‹•‹••—‡ǤƒŽ–‡”ƒ–‹˜‡ƒ’’”‘ƒ…Š‹•ˆ‘”–‘ƒ†‘’–ƒ’‘Ž‹…›•‹‹Žƒ”–‘‡…–‹‘ʹǤƒ

‘ˆ–Š‡ƒ‡†‡†”—Ž‡•‘˜‘Ž—–ƒ”›†‡Ž‹•–‹‰ȋ‡‘”ƒ†—–‘Ǥ–ʹͲʹͲ–ͲͳͲͶȌǤ

‡…‡ǡ–Š‡‹••—ƒ…‡‘ˆ˜‘–‹‰’”‡ˆ‡””‡†•–‘…•“—•–„‡ƒ’’”‘˜‡†„›ƒ–Ž‡ƒ•–ʹȀ͵‘ˆ–Š‡‡–‹”‡

‡„‡”•Š‹’‘ˆ–Š‡‘ƒ”†ǡ‹…Ž—†‹‰ƒŒ‘”‹–›ǡ„—–‘–Ž‡••–Šƒ–™‘ǡ‘ˆƒŽŽ‘ˆ‹–•‹†‡’‡†‡–

†‹”‡…–‘”•ǡƒ†•–‘…Š‘Ž†‡”•‘™‹‰ƒ–Ž‡ƒ•–ʹȀ͵‘ˆ–Š‡–‘–ƒŽ‘—–•–ƒ†‹‰ƒ†Ž‹•–‡†•Šƒ”‡•‘ˆ

–Š‡‘’ƒ›Ǥ —”–Š‡”ǡ–Š‡—„‡”‘ˆ˜‘–‡•ƒ‰ƒ‹•––Š‡‹••—ƒ…‡‘ˆ˜‘–‹‰’”‡ˆ‡””‡†•–‘…•

•Š‘—Ž†‘–„‡‘”‡–ŠƒͳͲΨ‘ˆ–Š‡–‘–ƒŽ‘—–•–ƒ†‹‰ƒ†Ž‹•–‡†•Šƒ”‡•‘ˆ–Š‡Ž‹•–‡†‘’ƒ›”

ȋǡʹͲʹͲȌ. Š‹•”—Ž‡…ƒ„‡ƒ†‘’–‡†„‡…ƒ—•‡ǡŽ‹‡˜‘Ž—–ƒ”›†‡Ž‹•–‹‰ǡ–Š‡‹••—ƒ…‡‘ˆ˜‘–‹‰

’”‡ˆ‡””‡†•–‘…•‡š…Ž—•‹˜‡Ž›–‘–Š‡…‘–”‘ŽŽ‹‰•–‘…Š‘Ž†‡”•…ƒƒ†˜‡”•‡Ž›ƒˆˆ‡…––Š‡‹–‡”‡•–

‘ˆ–Š‡‹‘”‹–›•–‘…Š‘Ž†‡”•Ǥ

ͶǤ Š‡–Š‡”‡ƒ”‡†‡…‹•‹‘•”‡Žƒ–‡†–‘–Š‡‹••—ƒ…‡‘ˆ‡™•‡…—”‹–‹‡•–Šƒ–ƒ›†‹Ž—–‡–Š‡‹–‡”‡•–

‘ˆ–Š‡‹‘”‹–›•–‘…Š‘Ž†‡”•ǡ–Š‡˜‘–‡•‘ˆ‡ƒ…Š†‹”‡…–‘”ǡ‡•’‡…‹ƒŽŽ›–Š‘•‡‘ˆ–Š‡‹†‡’‡†‡–

†‹”‡…–‘”•ǡ—•–„‡†‹•…Ž‘•‡†–‘–Š‡’—„Ž‹…ǤŠ‹•’—„Ž‹…†‹•…Ž‘•—”‡ƒ›…‘’‡Ž‡ƒ…Š†‹”‡…–‘”–‘

†‡…‹†‡„ƒ•‡†‘™Šƒ–‹•‘–Œ—•–Ž‡‰ƒŽ„—–™Šƒ–‹•‡–Š‹…ƒŽƒ†ˆƒ‹”Ǥ–Š‡”™‹•‡ǡ™Šƒ–ƒ”‡–Š‡

…‘†‡•‘…‘”’‘”ƒ–‡‰‘˜‡”ƒ…‡•—„‹––‡†–‘ˆ‘”ǫ

ͷǤ …ƒ•‡•™Š‡”‡–Š‡‹••—ƒ…‡‘ˆ˜‘–‹‰’”‡ˆ‡””‡†•–‘…•™‹ŽŽ‘–„‡‘ˆˆ‡”‡†–‘–Š‡’—„Ž‹…ǡ

—•–”‡“—‹”‡–Š‡•—„‹••‹‘‘ˆˆƒ‹”‡••˜ƒŽ—ƒ–‹‘”‡’‘”–•”‡‰ƒ”†‹‰–Š‡‹••—‡’”‹…‡ǤŠ‡•‡

ˆƒ‹”‡••˜ƒŽ—ƒ–‹‘”‡’‘”–•—•–„‡”‡“—‹”‡††‹•…Ž‘•—”‡•ǡ‹…Ž—†‹‰ƒŽŽ–Š‡ƒ••—’–‹‘•—•‡†‹

–Š‡˜ƒŽ—ƒ–‹‘•Ǥ‘‡‡’–Š‡‹†‡’‡†‡…‡ƒ†‘„Œ‡…–‹˜‹–›‘ˆ–Š‡˜ƒŽ—ƒ–‹‘‡–‹–‹‡•ǡ—•–

ƒ……”‡†‹–˜ƒŽ—ƒ–‹‘…‘’ƒ‹‡•ƒ†—•–„‡–Š‡‘‡–‘Š‹”‡–Š‡ǡ–Š‡…‘•–‘ˆ™Š‹…Š™‹ŽŽ„‡

…Šƒ”‰‡†ƒ‰ƒ‹•––Š‡…‘’ƒ›’Žƒ‹‰–‘‹••—‡–Š‹•‹†‘ˆ•‡…—”‹–›Ǥ‘Ž‹‹––Š‡„‹ƒ•‡•‘ˆ–Š‡

˜ƒŽ—ƒ–‹‘…‘’ƒ‹‡•ƒ†–‘…‘’‡Ž–Š‡–‘„‡‘”‡‘„Œ‡…–‹˜‡ǡƒ–Ž‡ƒ•––™‘˜ƒŽ—ƒ–‹‘”‡’‘”–•

…‘‹‰ˆ”‘†‹ˆˆ‡”‡–˜ƒŽ—ƒ–‹‘…‘’ƒ‹‡•—•–„‡’”‡’ƒ”‡†Ǥ…ƒƒ‡–Š‡ˆ‹ƒŽ†‡…‹•‹‘

”‡‰ƒ”†‹‰–Š‡‹••—‡’”‹…‡Ǥ‘™‡˜‡”ǡ‹ˆ–Š‡˜‘–‹‰’”‡ˆ‡””‡†•Šƒ”‡•™‹ŽŽ„‡Ž‹•–‡†ƒ†™‹ŽŽ„‡

‘ˆˆ‡”‡†–‘–Š‡’—„Ž‹…ǡ–Š‡‹••—‡’”‹…‡™‹ŽŽ„‡†‡’‡†‡–‘–Š‡ƒ”‡–‘”‘–Š‡„‘‘„—‹Ž†‹‰

ƒ…–‹˜‹–› ‘ˆ –Š‡ —†‡”™”‹–‡”•ǡ ƒ ’”‘…‡•• —†‡”–ƒ‡ ‹ –Š‡ ‹••—ƒ…‡ ‘ˆ • ‘” •–‘… ”‹‰Š–•

‘ˆˆ‡”‹‰•Ǥ

͸Ǥ ƒ†•Š‘—Ž†…‘•‹†‡”‹…”‡ƒ•‹‰–Š‡‹‹—’—„Ž‹…ˆŽ‘ƒ–ˆ‘”…‘‘••–‘…•„‡›‘†

‘‡Ǧ–Š‹”† ‘ˆ –Š‡ ‹••—‡Ǥ Š‹• ‹• –‘ …”‡ƒ–‡ ƒ „Ž‘…‹‰ ‹‘”‹–› –Šƒ– ™‹ŽŽ ’”‡˜‡– …‘–”‘ŽŽ‹‰

•–‘…Š‘Ž†‡”•ˆ”‘Šƒ˜‹‰ƒ„•‘Ž—–‡…‘–”‘Ž‘˜‡”–Š‡Ž‹•–‡†…‘’ƒ‹‡•ǤŠ‹•”—Ž‡—•–ƒ’’Ž›–‘

‡™•ƒ†‡š‹•–‹‰Ž‹•–‡†…‘’ƒ‹‡•Ǥ–”ƒ•‹–‹‘’‡”‹‘†‘ˆ–Š”‡‡›‡ƒ”•‹•”‡…‘‡†‡†

ͳ͸‡…–‹‘͵ͺ‘ˆ–Š‡‘”’‘”ƒ–‹‘‘†‡‘ˆ–Š‡Š‹Ž‹’’‹‡•Ǥ

ͳͷͺ Voting preferred shares and corporate control: Impact on minority stockholders’ rights

ˆ‘”–Š‡‡š‹•–‹‰Ž‹•–‡†…‘’ƒ‹‡•™Š‹…Šƒ”‡‘–›‡–…‘’Ž‹ƒ–™‹–Š–Š‡‡™‹‹—’—„Ž‹…

‘™‡”•Š‹’Ǥ

͹Ǥ Š‡‹‹—’—„Ž‹…‘™‡”•Š‹’ˆ‘”…‘‘•–‘…•—•–„‡ƒ’’Ž‹‡†–‘–Š‡˜‘–‹‰’”‡ˆ‡””‡†

•–‘…•‘…‡–Š‡”—Ž‡ˆ‘”ƒ‹‰–Š‹•–›’‡‘ˆ•‡…—”‹–›’—„Ž‹…Ž›Ž‹•–‡†‹•…”‡ƒ–‡†ƒ†ƒ’’”‘˜‡†Ǥ ͺǤ —„Ž‹…Ž›Ž‹•–‡†…‘’ƒ‹‡•™Š‹…Š™‹ŽŽ†‡Ž‹•–ƒ•ƒ”‡•—Ž–‘ˆ–Š‹•‡™•‡–‘ˆ”—Ž‡•—•–‘–„‡

ƒŽŽ‘™‡†–‘”‡Ž‹•–‘”Šƒ˜‡ƒˆ‘”ƒ›‘ˆ–Š‡…‘’ƒ‹‡•ƒˆˆ‹Ž‹ƒ–‡†™‹–Š–Š‡‰”‘—’‘”ƒ›‘ˆ

–Š‡‹”ƒŒ‘”•–‘…Š‘Ž†‡”•ˆ‘”ƒ–Ž‡ƒ•–ͳͲ›‡ƒ”•ǤŠ‹•‹•–‘ƒ‡–Š‡‹”‘™‡”•ƒ†ƒƒ‰‡”•

”‡ƒŽ‹œ‡–Šƒ––Š‡›Šƒ˜‡”‡•’‘•‹„‹Ž‹–›–‘’”‘–‡…––Š‡‹”‹‘”‹–›•–‘…Š‘Ž†‡”•‹ˆ–Š‡›™ƒ––‘

”‡ƒ‹Ž‹•–‡†ƒ†–ƒ‡ƒ†˜ƒ–ƒ‰‡‘ˆŠƒ˜‹‰„‡––‡”ƒ……‡••–‘–Š‡…ƒ’‹–ƒŽƒ†‘‡›ƒ”‡–•Ǥ

Arthur S. Cayanan ͳͷͻ

References

Žƒœƒǡ ǤȋʹͲʹͲǡ‘˜‡„‡”ʹͺȌǤ‡‰ƒ™‹†‡”ƒ‹•‡•ͶǤ͵͸ˆ”‘Šƒ”‡ˆˆ‡”‹‰ǤThe Manila Times.

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‹„ƒǡ…ǤȋʹͲͳͳǡƒ—ƒ”›ʹͻȌǤAmended Articles of IncorporationǤhttps://www.bdo.com.ph/

sites/default/files/pdf/BDO%20Unibank%20Amended%20Articles%20of%20Incorporation.pdf

‡–”‹‡˜‡†‘’”‹ŽͳʹǡʹͲʹʹǤ

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”ƒ†Ž‡›ǡǤ ǤȋͳͻͶͺȌǤ‘–‹‰‹‰Š–•‘ˆ”‡ˆ‡””‡†–‘…Š‘Ž†‡”•‹†—•–”‹ƒŽ•ǤThe Journal of Finance, 3ȋȌǡ

͹ͺǦͺͺǤhttps://www.jstor.org/stable/2975490?read-now=1&seq=11‡–”‹‡˜‡†‘’”‹ŽͳʹǡʹͲʹʹǤ

ƒ˜‡’‘”–ǡǤȋͳͻͷ͸ȌǤ‡ƒ•—”‹‰ƒ”‹‰•”‘–‡…–‹‘ˆ‘””‡ˆ‡””‡†–‘…•ǤThe Analysts Journal, 12 ȋͶȌǡ͵ͳǦ͵ͶǤ

‹”•– ‡ ‘”’‘”ƒ–‹‘ ȋʹͲͳͺǡ ƒ”…Š ͳͷȌǤ Amended Articles of IncorporationǤ https://www.firstgen.com.ph/static-assets/assets/file-uploads/our-company/articles-of-incorporation- and-by-laws/articles-of-incorporation/First-Gen-AAI_3.27.19.pdf‡–”‹‡˜‡†‘’”‹ŽͳʹǡʹͲʹʹǤ ‹”•–‡‘”’‘”ƒ–‹‘ǤȋʹͲͳͻǡʹͲͳͲǡʹͲͲͻǡʹͲͲ͸ȌǤAnnual Reports.

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Ž‘„‡ ‡Ž‡…‘ǡ …Ǥ ȋʹͲͳͶǡ —‡ȌǤ Amended Articles of IncorporationǤ https://www.globe.com.ph/

content/dam/globe/brie/About-us/corporate-governance/ documents/articles-of-incorporation/Articles- of-Incorporation.pdf‡–”‹‡˜‡†‘’”‹ŽͳʹǡʹͲʹʹǤ

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‘’”‹ŽͳʹǡʹͲʹʹǤ

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”‘••ƒǡǤȋͳͻ͵ͳȌǤ‘”’‘”ƒ–‡‡…—”‹–‹‡•–•’‡…‹ƒŽŽ›‘‘ƒ†”‡ˆ‡””‡†–‘…•ǤAmerican Bar Association Journal, 17, ȋʹȌǡ ͳʹ͵ǦͳʹͻǤ https://www.jstor.org/stable/25708171?searchText=preferred +stocks&searchUri=%2Faction%2FdoBasicSearch%3FQuery%3Dpreferred%2Bstocks%26so%3Drel&

ab_segments=0%2FSYC-6294%2Ftest_segment 2&refreqid =fastly-default%3A9e82e56ed2dfe 22cf1f62d7132be 8e5e&seq=4‡–”‹‡˜‡†‘’”‹ŽͳʹǡʹͲʹʹǤ

–‡”ƒ–‹‘ƒŽ‘–ƒ‹‡”‡”‹ƒŽ‡”˜‹…‡•ǡ…ǤȋʹͲͳͳǡ ‡„”—ƒ”›ȌǤAmended Articles of IncorporationǤ https://cdnweb.ictsi.com/s3fs-public/2020-01/ictsi_amended_articles_of_incorporation_22_may_

2011.pdf‡–”‹‡˜‡†‘’”‹ŽͳʹǡʹͲʹʹǤ

–‡”ƒ–‹‘ƒŽ‘–ƒ‹‡”‡”‹ƒŽ‡”˜‹…‡•ǡ…ǤȋʹͲͳͻǡʹͲͳͲȌǤAnnual Reports.

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philippines-2018.pdf‡–”‹‡˜‡†‘’”‹ŽͳʹǡʹͲʹʹǤ

ƒ”“—‹–ǡǤƒ†—””›ǡǤǡȋʹͲʹʹǡ ‡„”—ƒ”›ʹͺȌǤ”‡ˆ‡””‡†–‘…•–Š‡‡•–‘ˆ‘†•ƒ†“—‹–›‹

‡ ‡…—”‹–›Ǥ Forbes AdvisorǤ https://www.forbes.com/advisor/investing/what-is-preferred-stock/

‡–”‹‡˜‡†‘ƒ›ʹ͵ǡʹͲʹʹǤ

‡‰ƒ™‹†‡‘•–”—…–‹‘‘”’‘”ƒ–‹‘ǤȋʹͲʹͳȌǤAnnual Report.

‡‰ƒ™‘”Ž† ‘”’‘”ƒ–‹‘Ǥ ȋʹͲͲ͹ǡ ƒ—ƒ”›ȌǤ Amended Articles of Incorporation.

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‡‰ƒ™‘”Ž†‘”’‘”ƒ–‹‘ǤȋʹͲͳͻǡʹͲͲ͹ȌǤAnnual Reports.

‡”ƒ†‘ƒ”ƒ†ƒǡȋʹͲʹͳǡ‡’–‡„‡”ͳ͸ȌǤ–‘…‘‡–ƒ”›ǣ”‡ˆ‡””‡†Šƒ”‡•ͳͲͳǤPhilstar Global https://www.philstar.com/business/stock-commentary/2021/09/16/2127531/preferred-shares-101

‡–”‹‡˜‡†‘’”‹ŽͳʹǡʹͲʹʹǤ

ͳ͸Ͳ Voting preferred shares and corporate control: Impact on minority stockholders’ rights

‡–”‘ ƒ…‹ˆ‹… ˜‡•–‡–• ‘”’Ǥ ȋʹͲͳͷǡ ƒ›ȌǤ ‡†‡† ”–‹…Ž‡• ‘ˆ …‘”’‘”ƒ–‹‘Ǥ https://www.mpic.com.ph/wp-content/uploads/2021/02/MPIC-Ameded-AOI-August-18-2016.pdf

‡–”‹‡˜‡†‘’”‹ŽͳʹǡʹͲʹʹǤ

‡–”‘ƒ…‹ˆ‹…˜‡•–‡–•‘”’ǤȋʹͲͳͻǡʹͲͳ͸ǡʹͲͲͻȌǤAnnual Reports.

‹–…Š‡ŽŽǡǤȋͳͻͻ͸ȌǤŠ‡—œœŽ‹‰ƒ”ƒ†‘š‘ˆ”‡ˆ‡””‡†–‘…ȋ†Š›‡Š‘—Ž†ƒ”‡„‘—–‹–ȌǤThe Business Lawyer, 51ȋʹȌǡ ͶͶ͵– Ͷ͹͹Ǥhttps://www.jstor.org/stable/40687647?read-now=1&refreqid=

excelsior%3A6f09e5c8 5b1b56e549125ad3653ba789&seq =35‡–”‹‡˜‡†‘’”‹ŽͳʹǡʹͲʹʹǤ

‡”‡œǡǤȋʹͲͳͷǡƒ›ʹ͸ȌǤ”‡ˆ‡””‡†Šƒ”‡•ǣ™‡”•Š‹’‘”‡„–ǫThe Manila Times.‡–”‹‡˜‡†ˆ”‘

https://www.manilatimes.net/2015/05/26/business/columnists-business/preferred-shares-ownership-or- debt/186839/ Retrieved on January 9, 2021.

‹…Š‡•ǡ Ǥ ȋͳͻ͹Ͳǡ ƒ”…ŠȌǤ ‹ƒ…‹‰ ™‹–Š ‘˜‡”–‹„Ž‡ ”‡ˆ‡””‡† –‘…ǡ ͳͻ͸ͲǦͳͻ͸͹ǤThe Journal of Finance, Vol. 25, No. 1, ’’Ǥ ͷ͵Ǧ͸͵Ǥ https://www.jstor.org/stable/2325799?read-now=1&refreqid=

excelsior% 3Ae8211ab860c34af16abce05d6d03ce54&seq=7‡–”‹‡˜‡†‘’”‹ŽͳʹǡʹͲʹʹǤ

ǡ …Ǥ ȋʹͲͳͳǡ —Ž›Ȍ ‘” ʹͲǦ Š‹…Š ‘–ƒ‹• ‡†‡–• –‘ ”–‹…Ž‡• ‘ˆ …‘”’‘”ƒ–‹‘Ǥ https://www.sec.gov/Archives/edgar/data/78150/000119312512137315/d318504d20f.htm#rom31850 4_67‡–”‹‡˜‡†‘’”‹ŽͳʹǡʹͲʹʹǤ

ǡ…ǤȋʹͲͳͻǡʹͲͳʹǡʹͲͳͳȌǤAnnual Reports.

”‘Œ‡…– —”‹•’”—†‡…‡Ǥ ȋʹͲͳͳȌǤ Gamboa V. Teves (G.R. No. 176579; June 28, 2011).

https://www.projectjurisprudence.com/2017/05/gamboa-v-teves-gr-no-176579-june-28-2011.html Republic Act No. 11232, An Act Providing for the Revised Corporation Code of the Philippines (2019).

‡…—”‹–‹‡•ƒ†š…Šƒ‰‡‘‹••‹‘ȋȌǤȋʹͲͳ͹ȌǤ‡‘”ƒ†—‹”…—Žƒ”‘Ǥͳ͵ǡ‡”‹‡•‘ˆʹͲͳ͹ǣ

—Ž‡• ƒ† ‡‰—Žƒ–‹‘• ‘ ‹‹— —„Ž‹… ™‡”•Š‹’ ȋȌ ‘ ‹–‹ƒŽ —„Ž‹… ˆˆ‡”‹‰•Ǥ https://www.sec.gov.ph/mc-2017/mc-no-13-s-2017-rules-and-regulations-on-minimum-public-

ownership-mpo-on-initial-public-offerings/‡–”‹‡˜‡†‘’”‹ŽͳʹǡʹͲʹʹǤ

‡…—”‹–› ƒ ‘”’‘”ƒ–‹‘ ȋȌǤ ȋʹͲͳ͸ȌǤ Change in Number of Issued and Outstanding Shares.

Š––’•ǣȀȀ™™™Ǥ•‡…—”‹–›„ƒǤ…‘Ȁƒ„‘—–Ǧ—•Ȁ‹˜‡•–‘”Ǧ”‡Žƒ–‹‘•Ȁ’—„Ž‹…Ǧ†‹•…Ž‘•—”‡•ȀǤ ‡–”‹‡˜‡† ‘

ƒ—ƒ”›ͳ͸ǡʹͲʹͳǤ

‡…—”‹–›ƒ‘”’‘”ƒ–‹‘ȋʹͲͳͶǡ’”‹ŽͺȌǤPSE Disclosure on Amendments to Articles of Incorporation https://www.securitybank.com/about-us/investor-relations/public-disclosures/ ‡–”‹‡˜‡† ‘ ’”‹Ž ͳʹǡ ʹͲʹʹǤ

‡…—”‹–›ƒ‘”’‘”ƒ–‹‘ȋʹͲͳͻǡʹͲͳ͸ǡʹͲͳͶȌǤAnnual Reports.

‘Ž†‘ˆ•›ǡ Ǥ ȋͳͻ͹ͳǡ ƒ”…Š– ’”‹ŽȌǤ ‹‡Ž†Ǧ‹• ‡”ˆ‘”ƒ…‡ ‘ˆ ‘˜‡”–‹„Ž‡ ‡…—”‹–‹‡•ǤFinancial Analysts Journal, Vol. 27 (2), pp. 61-65, 79Ǥhttps://www.jstor.org/stable/4470790?seq=6‡–”‹‡˜‡†‘

—‡ʹǡʹͲʹʹǤ