MANILA, Philippines - The Ortigas Group's flagship property firm OCLP Holdings Inc. failed to hold its anticipated annual stockholders’ meeting on Tuesday after a family faction obtained a temporary restraining order (TRO). The meeting’s cancellation highlighted the deepening rift within the clan and spelled further delays to the potential takeover of suitors SM Investments Corp. or Ayala Land Inc. (ALI).
Documents obtained by the BusinessMirror showed that the SM Group’s Ortigas allies, namely, the faction led by Fernando Ortigas, obtained the TRO from the Regional Trial Court in Pasig City barring any party from proceeding with the annual meeting of OCLP Holdings on January 8, , or within a period of 20 days after January 7.
The other faction, called the Rafael Ortigas Group and represented by the elder Ignacio Ortigas, has allied with the Zobel family’s ALI.
The document showed that Fernando’s camp was concerned that proceeding with the stockholders’ meeting, where a new slate of directors could be elected, would disrupt an ongoing arbitration process among the two Ortigas factions still in the process of addressing their “disputes and differences.”
“For the shareholders’ meeting to proceed on January 8, 2013, grave and irreparable injury will be suffered by petitioners unless enjoined and until an arbitration between and among parties is held and finalized defining the rights of everyone,” a portion of the TRO showed.
The arbitration process is in line with a covenant included in the shareholders’ agreement of OCLP Holdings dated 2010, which was partly designed to prevent a scenario where one side can gain control of the company without the others’ consent.
The ongoing dispute is centered on which group will be the eventual owner or strategic partner of OCLP Holdings. SM Investments and ALI have both expressed their keen interest on the firm and its massive urban land bank.
The issue is also complicated because both SM Investments and ALI have allied with either Ortigas faction, although neither side has a majority share in OCLP Holding, hence, the current stalemate.
Based on the most recent count, Rafael’s group has the bigger share at about 47 percent, Fernando’s share is slightly above 40 percent, the Roman Catholic Church has about 9 percent and the remainder comprises a very small minority. This means that the SM Group and ALI each has three board seats through their allies while the remaining three are occupied by OCLP Holdings’ top managers.
Despite the current impasse, a ranking official of the SM Group said they remain interested in OCLP Holdings. “We continue to keep our interest and options open,” the source said. ALI officials did not immediately respond for comment on Tuesday.
Both ALI and SM Investments have the common goal of tapping OCLP Holdings’ vast urban landbank, which amounts to 55 hectares of prime Metro Manila land, including the Greenhills Shopping Center and parts of the Ortigas Business District.
ALI, a full-range builder, is seeking to cement its position as the leading developer of business districts in Metro Manila while SM Investments, which owns the country’s biggest shopping mall operator and its largest bank, is also aggressively expanding its property footprint.
The current developments were set into motion last year when The SM Group agreed to buy the 34-percent stake of exiting shareholder Hongkong and Shanghai Banking Corp. as well as the shares held by the Fernando and Rafael factions.