The Philippine Stock Exchange (PSE) said the suspension of the trading of Holcim Philippines Inc. is within the rules of the bourse and that the tax treatment of its tender offer shares are within the law.
The PSE made the statement over the weekend after Holcim informed shareholders Friday the facilitation of tendered shares under its tender offer running between July 10 and August 30, “will have to be effected outside the facilities of the PSE.”
This follows after the PSE denied Holcim’s request for the lifting of the trade suspension since Holcim’s public float is now below the minimum public ownership cap of 10 percent.
Holcim in a regulatory filing outlined the PSE’s justification, which include the Bureau of Internal Revenue’s (BIR) rule that provides that the tax treatment of sales or other disposition of shares of stocks of a publicly-listed company which is non-compliant with the minimum public ownership (MPO) requirement shall be subject to capital gains tax (CGT) and documentary stamp tax (DST) and that it can only be recorded in the books of the company after Holcim has secured necessary certificates like the certificate authorizing registration (CAR) and/or tax clearance certificate (TCC).
“Shareholders who wish to participate in the tender offer are strongly urged against tendering their shares at the last minute to allow sufficient time to correct any deficiency in their application,” it said.
The PSE in its statement said t it suspended trade in Holcim shares on June 29 after the company’s public float fell to 5.05 percent after Holcim announced the sale of Sumitomo Osaka Cement Co., Ltd.’s 9.22 percent stake in the company to another majority stockholder Holderfin B.V., below the MPO requirement of 10 percent.
“Since trading in Holcim shares is presently suspended, the sale of the tendered shares will be subject CGT and DST instead of the standard stock transaction tax (STT). This tax treatment is expressly provided for in BIR Regulation No. 16-2012 (RR 16-2012) that requires every sale, barter, exchange or other disposition of shares of stock of a publicly listed company which is non-compliant with the MPO to be subject to CGT and DST. Aside from the applicable tax rate, the shareholders have to facilitate all the documentary requirements, including the relevant tax clearance from the BIR, needed to transfer shares sold outside of the Exchange ,” the PSE said.
“Holcim now wishes to assign the responsibility of addressing this tax predicament to the Exchange by informing shareholders that the matter can only be resolved if the suspension on its shares will be lifted by PSE. The PSE takes strong exception to this ‘finger-pointing’ attempt of the company. The lifting of the suspension is not a discretion or prerogative that can be exercised by PSE. It is a regulation covered and imposed under BIR RR 16-2012. PSE has always upheld and will continue to uphold, not violate, existing laws and regulations,” it added.
The PSE said the problems and concerns would not have arisen “had the parties involved, Holcim and Holderfin (also a part of the Holcim Group) took into consideration the interest of its public shareholders before implementing the share transaction between Holderfin and Sumitomo.”
“They should have thoroughly considered the repercussions of the Holderfin share purchase on its public float before implementing the same,” it said.
