The majority shareholders of the Lopez family have petitioned the Securities and Exchange Commission (PSE) and the Philippine Stock Exchange (PSE) to investigate First Gen Corp. over alleged disclosure violations involving “poison pill” provisions in agreements with Prime Infrastructure Capital Inc.

In a statement on Wednesday, April 22, the majority group alleged that First Gen failed to timely disclose two specific clauses designed to ensure Federico “Piki” Lopez remains chairman and chief executive officer.

The group claimed these provisions were disclosed six months and two months late, respectively, which they argued constitutes a breach of market transparency rules intended to protect the investing public.

The dispute centers on two high-value transactions between the energy companies. In November, Prime Infrastructure acquired 60 percent of First Gen’s natural gas assets for ₱50 billion. This was followed in February by First Gen’s ₱75 billion acquisition of a 40 percent stake in Prime’s hydropower business, a figure that was later adjusted to 33 percent.

According to the majority group, the undisclosed provisions allow Prime Infrastructure to buy out First Gen’s interests in both the gas and hydropower ventures at a 25 percent discount should Piki Lopez be removed from his leadership roles. Such a move would result in an estimated ₱24 billion loss for First Gen.

The majority shareholders argued that the scale of these deals—representing approximately one-third of First Gen’s market capitalization—necessitated direct consultation with the majority owners rather than sole approval by the board of directors.

They contended that the potential financial penalties would weigh heavily on future shareholder dividends and the company’s valuation.

First Gen reportedly admitted the clauses' existence only after the majority group raised the issue publicly, prompting an inquiry by the PSE. In its official response, First Gen stated that the “poison pill” tied to the November transaction would only be activated if the February provision was triggered. However, the majority group questioned the timeline, suggesting the November clause may have been an “afterthought or an insertion” because it appeared to reference a transaction that did not yet exist.

The petition asks regulators to determine if these provisions were fully disclosed to independent directors and why the board did not demand immediate public disclosure.

Under PSE regulations, material agreements are generally required to be disclosed within minutes of execution. The majority group noted they have yet to receive full copies of the investment agreements despite repeated requests. (James A. Loyola)