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Shareholders of Liberty Flour Mills Inc. have requested that the Securities and Exchange Commission intervene and investigate alleged irregularities involving the company, as well as the ₱804.7 million in uncollected receivables from its distributor, Parity Values Inc. (PVI).
Through their counsel, Bernaldo Po Presto & Poblador Law Office, former LFM President and Director Sandra Uy, and former Assistant Treasurer Stella Uy claimed that they were eased out of the company’s board and management when they raised concerns regarding LFM’s mounting and long-standing receivables from PVI.
They noted that PVI enjoys generous credit terms of 180 days, and receivables have ballooned due to failure to enforce prompt collection.
The two added that, during LFM’s annual stockholders’ meeting, LFM Corporate Secretary and PVI Treasurer William L. Ang confirmed that PVI’s payment terms have extended up to about 360 days, although there was a plan to reduce receivables by 40 percent next year.
“However, no specific measures for recovery or collection were presented during the ASM,” they said and pointed out that there are interlocking directors between LFM and PVI, namely John Carlos Uy, Willy G. Ng, and Ang.
They said, “These overlapping roles raise serious issues of conflict of interest to the detriment of LFM and minority shareholders.”
Thus, they asked the SEC to summon the parties involved, including LFM’s board of directors and PVI officers, to account for the “irregularities” and investigate the arrangement between the two firms in light of SEC rules on Related Party Transactions.
The SEC was also asked to “Examine the conflict of interest arising from the interlocking directors of LFM and PVI - Mr. John Carlos Uy, Mr. Willy G. Ng and Mr. William I. Ang, with focus on the latter who serves as LFM's Corporate Secretary and PVIs Treasurer-and determine whether their actions constitute a breach of fiduciary duty and violation of the Revised Code of Corporate Governance.”
They also asked the SEC to “Assess whether the Board's inaction in enforcing the collection of PVI receivables amounts to corporate abuse and proves the existence of conflict of interest, to the detriment of LFM and its minority shareholders.”
“PVI's mounting receivables which is nearly a billion pesos, coupled with the Board's inaction, cannot be dismissed as normal in the ordinary course of business.
“These circumstances strongly suggest the presence of conflict of interest and possible corporate abuse, which we respectfully request the Honorable Commission to investigate and penalize,” the two claimed.
InsiderPH reported earlier that Ang had blamed past officers for at least nine governance issues that he said could cost the company ₱300 million.
This includes the sale of the Liberty Building in Makati to subsidiary LFM Properties Corporation in 2023.
