The Social Security System has investments worth more than P1 billion, while the Government Service Insurance System has investments worth almost P1 billion, based on the April 28 closing price of P16.86.
The Lopez family majority has warned of potential losses worth billions of pesos for government pension funds – the Social Security System (SSS) and the Government Service Insurance System (GSIS) – in their investments in First Gen Corp. should the two poison pills protecting tycoon Federico “Piki” Lopez be triggered.
“The huge loss would reduce the capacity of SSS and GSIS to assist their private and government-sector members and to pay for their retirement benefits, including monthly pensions,” the majority said in a statement on Wednesday, April 29.
SSS has investments worth more than P1 billion, while GSIS has investments worth almost P1 billion, based on the April 28 closing price of P16.86.
The majority, however, claimed that the biggest potential loser would be global investment firm KKR, whose shares, worth P12 billion, are held by The Hongkong and Shanghai Banking Corp. Ltd. (HSBC).
The majority is calling for a government investigation, which it said is crucial since First Gen “has refused to release copies of the investment agreements to determine whether the poison pills existed at the time the investments were disclosed, or were mere afterthoughts.”
“More than disclosure missteps, it removes the right of the board and shareholders to replace management, a fundamental right of all shareholders, especially for listed companies,” it said.
The majority said SSS and GSIS should have opposed the poison pills, claiming that they only benefit Piki, who sits as chairman and CEO of First Gen.
“The pills operate simply: if Piki and his cohorts are removed from First Gen, Prime can buy out First Gen’s gas and hydropower businesses for P125 billion at a 25 percent discount. First Gen and its shareholders got zero protection and benefit,” it said.
Aside from KKR’s holdings under HSBC, other foreign investors have invested in First Gen through foreign custodians such as Standard Chartered and Deutsche Bank.
The Lopez majority said these foreign investors are likely to question the poison pills as they adhere to high standards of corporate governance, particularly transparency and protection of shareholders’ rights.