A boardroom row in one of the country's largest canned seafood exporters is heating up after the Securities and Exchange Commission (SEC) voided the shares acquired by the controlling stockholder of Alliance Select Foods International nearly a decade ago.

Alliance Select said in a regulatory filing it will appeal the recent SEC decision and will "exhaust all available legal remedies including filing a petition for review with the Court of Appeals."

It added the decision will have no effect on the company's business, financial condition, ownership structure and capital structure "until it becomes final, executory and fully implemented."

"We remain focused and driven to continue building on the momentum of our improved performance from [the third quarter of 2022]. This development neither dampens our spirits nor alters our plans for Alliance Select. It's business as usual," Alliance president and CEO Jeoffrey Yulo said in the filing.

The SEC, in a decision dated Dec. 15, voided the acquisition of shares made by Strongoak Inc. via private placement and stock rights offering transactions in 2014 and 2015 for supposedly violating Section 19 of the Securities Regulation Code relating to the rule on tender offers.

Strongoak is the controlling stockholder of Alliance Select with a 55.31 percent stake, based on its latest ownership filing.

The company said the SEC en banc reversed the ruling of the corporate regulator's Markets and Securities Regulation Department (MSRD) on a Nov. 2, 2020 complaint filed by minority shareholders Hedy S. C. Yap-Chua, Harvest All Investment Ltd., Victory Fund Ltd. and Bondeast Private Ltd.

The MSRD, last May 19, 2022, dismissed the complaint for "prescription of action and forum shopping."

Harvest All Investment and Victory Fund respectively own 7.09 percent and 5.54 percent of Alliance Select while Bondeast owns 0.52 percent.

Regulator's decision

According to the SEC en banc decision, the shares acquired by Strongoak "are hereby declared void subscriptions and shall be cancelled from the stock and transfer book of [Alliance Select] where these shares shall be considered unsubscribed, and shall be allocated for subscription by any person who intends to buy the same provided that he or she complies with all the legal requirements."

"Once the subscription is fully paid, [Alliance Select] shall pay Strongoak the price it paid for the subscriptions that were nullified," the decision added.

Alliance Select has a market value of P1.37 billion. It booked a $617,000 loss in the first nine months of 2022 while revenues fell 23 percent to $23.7 million. The company party blamed the drop in earnings to the sale of farmed salmon unit Akaroa in November 2021. INQ