The VTI ownership issue

By: Modesto P. Sa-onoy

The search for the whereabouts of the P380 million was initiated in August last year during the presidency of Leo Rey. I don’t know who among the members of the VTI board of directors insisted on an audit after the bank reported unusual withdrawals. It does not matter who did, but an investigation discovered anomalies in the Manila Purchasing Office as early as that time. The investigation was completed in April this year and then the family feud exploded.

The board of Vallacar Transit must have been aghast at the huge siphoning of company funds and they did two things. First, they filed charges against Rowena Sarona and Rey Repollo. They were unanimous in that. Then they removed Leo Rey as president. That was when the mother intervened. I will not repeat what happened thereafter. Much had already been said and written.

A stock corporation is owned by the people or institutions that have shares of stocks. Whoever has the largest number of shares control the company because the voting in the corporation is by shares, not persons. One man or several may control the company by the sheer number of shares and there is nothing the other stockholders that cannot gather enough shares can do.

As Vallacar Transit Incorporated is a family corporation, the members of the family own shares. How the shares were distributed depends on its founder, and in this case, Ricardo B. Yanson. His wife, Olivia was a co-founder and therefore held the other half of the company in conjugal property.

A corporation, however, cannot have only one or two shareholders, otherwise, it is a single proprietorship. A corporation requires at least five members or shareholders. In the VTI case, we assume that Ricardo and Olivia gave shares to the children as an inheritance, but the parents retained control. Lacking documentary evidence, like company history we assume their shareholdings. When they became shareholders is not important but VTI is a closed, family only corporation and still limited to direct descendants; in-laws not allowed. Recent events showed that in-laws must have been given qualifying shares.

Despite the necessity of knowing who owns the company, public discussion on the issue of ownership of VTI was blocked because of the sub judice rule. However, last week the court dismissed the case and thus the rule is lifted. As of this writing, there is no news that a motion for reconsideration or an appeal had been filed. If there is, then the issue remains with the court. With the dismissal, the issue now returns to the public square. Here we deal with facts.

First, we must junk the claim of the camp of Leo Rey that the court had already determined the ownership of the company. That was a misleading shot and the other side quickly responded rightly that this issue was not resolved. It was just a small setback. Anyway, leave the lawyers to their devices.

Documents regarding ownership shown in the General Information Sheet on hand is based on a Special Board meeting of July 7, 2019. All the common shares of 206,200,000 are fully subscribed without any share by the public. The directors and officers are Roy Yanson, Emily Yanson, Ginnette Y. Dumancas, Ma. Lourdes Celina Y. Lopez, Ricardo Yanson, Jr., Leo Rey Yanson and Jose Jonathan Ealdama. Note: Olivia V. Yanson is not on the list.

Here are the stockholders and their shares: Roy has 19.41%; Ginnette has 19.14%; Emily has 2.92%; Celina has 19.41%; Ricardo Jr. has 19.42%; Leo Rey has 19.42% and Ma. Susan Yanson has 0.00485%. That makes a 99.99% ownership, all of which had been paid up. The company’s total assets are P2.252 billion. A lot of money to fight for.

In that Special meeting of July 7, only the four Yanson siblings (Roy, Emily, Celina and Ricardo, Jr) attended. Leo Rey and Ginnette refused to attend and challenged its legality claiming the board meeting did not constitute a majority shares. I will not discuss the legal issues only that from the SEC records the four had 61.16% of all the common shares which constitutes the majority.

While Leo Rey, Ginnette and Olivia claimed they have the majority, they had not presented any documentary proof, mainly from the SEC or any other agreement or stock certificates. In fact, Olivia is not a stockholder. Why?

Let’s answer that tomorrow.