Monday, November 27, 2006 Halt in SMC stock trading due to corporate governance
THE suspension of stock trading of San Miguel Corp. (SMC) by the Philippines Stock Exchange (PSE) last Thursday is a demonstration of what the PSE can do to encourage public companies to practice corporate governance.
During the working session of the Institute of Corporate Directors (ICD) at Shangri-La’s Mactan Island Resort last Thursday, PSE president and chief executive officer Francis Lim announced that he ordered for the temporary suspension of trading of Southeast Asia’s biggest food and beverage company shares after a report that it allegedly “bloated” revenue figures.
He said his decision was in the name of corporate governance.
Corporate governance is making the management of a publicly-listed company answerable or accountable for its acts to the stockholders.
“I have ordered the suspension of trading for them to clarify the issue and for the public to digest the information,” Lim said.
Trading stopped for half an hour with the PSE citing a national daily report that San Miguel “fraudulently bloated its sales revenue by as much as P20 billion over a three-year period.”
The newspaper report also said the PSE allowed the resumption of trading after San Miguel cited that its sales practices and financial reporting are above board. (JBN)
