Tuna canner Alliance Select Foods International Inc. (ASFII) has reached a compromise agreement with its Singaporean minority shareholders and former board directors after more than 10 years of legal disputes.
In a disclosure to the Philippine Stock Exchange (PSE), ASFII said it entered into the agreement with shareholders Hedy S.C. Yap-Chua, Harvest All Investment Limited, Victory Fund Limited, Bondeast Private Limited, and the estate of Albert Hong Hin Kay.
The agreement to mutually desist from prosecuting their claims and counterclaims against each other came after "serious deliberation and with neither party admitting any fault or liability of any kind or nature."
The legal battles began in 2014 when Hong and Yap-Chua sought to declare the nullity of the ASFII board resolution to sell almost 500 million new shares to Strong Oak Inc.
Chua alleged that key directors of Alliance Select were negligent in their duty, for allegedly railroading fellow board members on the issuance of almost 500 million unissued shares to Strong Oak.
The complaint described the deal as a "fly-by-night deal" that effectively handed Strong Oak the second-largest stake in Alliance Select at 28.7 percent.
Hong and Chua claimed they were given inadequate notice of Alliance Select's issuance of shares to Strong Oak, and Chua was likewise steamrolled when she tried to raise due concerns about the entry of the third-party investor.
According to Hong and Chua, Alliance Select called a board meeting to discuss an update on capital generation. About an hour before it took place, both shareholders received an email containing an information pack on Strong Oak, which was the first time they had heard of the potential investor.
During the meeting, "when petitioner Chua began to ask two or three questions about the capital raising, she was abruptly cut by Jonathan Dee who immediately moved to approve the issuance of almost 500 million unissued shares, and to allow Strong Oak Inc. to subscribe to such shares."
"And immediately, without any discussions and without allowing Petitioners [Dr. Hong and Chua] to comment, Respondents voted to approve."
Chua said these actions constituted violations of boardroom protocols set by the Securities and Exchange Commission (SEC) and provisions underlined by the Philippine Code of Corporate Governance.
Strong Oak's spokesman said it is an investment vehicle wholly owned by Seawood Resources, Inc., a multi-billion peso investment company headed by Grace Vera Cruz.