PHA has fallen by 48 percent to 95 centavos per share as of August 2 from June 1 when the company disclosed that the Securities and Exchange Commission (SEC) approved the increase in its authorized capital from P564 million to P1.5 billion.

READ: Raul Anonas replies to Bilyonaryo article on PHA’s discounted purchases, loans

With the capital hike, PHA finally pushed through with the debt-to-equity conversion of its P354 million loans and the entry of businessman Marvin Dela Cruz of SquidPay Technology into the company.

A Babbler said a closer look at the details of PHA’s capital restructuring would show that public shareholders, who drove up the stock price to a peak of P3.45 in the first quarter, were getting the short end of these transactions via deals cooked up by the company’s insiders.

On July 21, PHA disclosed it issued 540.983 million shares to liquidate its convertible notes at 70 centavos per share or a total value of P378 million.

More than half of the recipients of the steeply-discounted PHA shares were the company’s top managers and their allies:

* Serafica’s Asian Alliance Investment with P67.32 million;

* Philippine Business Bank Trust and Investment Center, where Asian Alliance president Roberto Atendido sits as a director, with P60.328 million;

* Anonas with P50.651 million;

* Myka Advisor and Consultancy led by Atendido with P11.016 million;

* Paxys president Tarcisius M. Medalla with P10.33 million (Atendido is a director of Paxys); and

* PHA corporate secretary Roberto V. San Jose with P10.33 million.

The Babbler said public investors were also shocked that Serafica and Anonas were among the individuals who gave a P100 million loan to the group of businessman Marvin Dela Cruz to facilitate SquidPay’s backdoor listing through PHA.

This was initially disclosed by PHA on 2 March 2021 or five months after Dela Cruz agreed to subscribe to 2.539 billion shares or 55 percent of PHA at 33 centavos per share.

With the issuance of new shares, Serafica and Anonas received P66 million and P12.3 million worth of PHA shares, respectively, from their loan to the Dela Cruz group.

The Babbler pointed out that so far, only Dela Cruz and his allies have taken a stake in PHA and not SquidPay, although PHA claimed it would be done before September 30 this year.

“SquidPay was never injected into PHA, it was the shareholders of SquidPay who bought into PHA at a bargain price. Where is the benefit so far to the company?” the Babbler asked.

The Babbler also said pegging a value on the share swap between PHA and Squidpay would be tricky considering that Dela Cruz’s fintech was only incorporated on 29 May 2020 or just five months before the deal with PHA.

The Babbler questioned the lack of transparency in pegging Dela Cruz’s buy-in supposedly at book value.

“I think this is not fair to the investing public. Whether it is illegal or not, the PSE should be able to monitor. While the PSE asks for comprehensive disclosures, it has failed to dissect the details of these transactions to protect the publc,” said Babbler.