Documents show Philippine Daily Inquirer’s majority owners, the Rufino-Prieto Clan, are using their other family-owned companies to cannibalize what little is left of the newspaper company’s assets, at the expense of minority stockholders who may be left with nothing if and when the media firm declares bankruptcy.
PDI sells land to Lexmedia
On 29 August 2018, Inquirer directors approved the sale of Inquirer-owned land near the Makati Central Business District. The board, at the time, is mostly made up of members of the Rufino-Prieto Clan, including:- Alexandra “Sandy” Prieto-Romualdez (President)
- Carlos Rufino
- Macario Rufino (Treasurer)
- Paolo Prieto
- Marixi Prieto
- TCT No. 182449 – 324 sqm – Php 21,700,000
- TCT No. 182450 – 331 sqm – Php 29,600,000
- TCT No. 182451 – 340 sqm – Php 30,400,000
- TCT No. 182452 – 340 sqm – Php 30,400,000
- TCT No. 182453 – 331 sqm – Php 22,200,000
- TCT No. 182454 – 324 sqm – Php 21,700,000
A suspiciously low price
The sale price raises suspicion because the Zonal Value of the six Barangay Tejeros lots along Chino Roces Avenue is Php 120,000 per sqm based on Department of Finance Department Order 24-2017 [4].To illustrate the point even further, listings for lots within the same general area are for much higher prices, one listing for a 641-sqm lot [5] is for Php 300,000 per sqm, while another listing for a 511-sqm lot [6] is for Php 245,000 per sqm.
Why were the Rufino-Prietos sell PDI-owned land, caring little about the losses they incurred for selling it at so much lower than market rates, to the detriment of PDI shareholders?
The Rufino-Prietos, for example, could have listed the land for 25% more or around Php 100,000 per sqm, and somebody would’ve readily bought it.
Oh! I almost forgot to mention that the sale includes all improvements in the six lots, including the Inquirer Building itself.
Lexmedia bought PDI land at lower than market value, implying that the Rufino-Prietos gave away the Inquirer building and all other improvements to Lexmedia FOR FREE.
Why did the Rufino-Prietos do what they did?
I honestly do not care if the Rufino-Prietos throw money on the streets. Still, we must remember that we are talking about the Philippine Daily Inquirer, which has minority shareholders comprised of lowly journalists who dreamt of a better economic future for themselves.
The decision to sell PDI land at scandalously low prices affects not just the Rufino-Prieto Family but also the minority shareholders who are not part of the PDI board that approved the sale.
PDI’s owners as of 2018 [7] show at least thirteen minority shareholders, including the veteran journalist Vic Agustin, who in October 2019 sued the Rufino-Prietos for Syndicated Estafa precisely for these allegedly onerous transactions [8].
But then, an injury to PDI must also be an injury to the Rufino-Prietos, being that the latter are majority shareholders of PDI. That sounds contradictory, right?
Well, not if you check on who the Rufino-Prietos sold the PDI land to.
This is a tricky question because it appears that, based on documents from the Securities and Exchange Commission, Lexmedia’s ownership structure is buried in layers upon layers of corporations.
To illustrate, Lexmedia’s ownership structure [9] is as follows:
There are three Rufino-Prietos in the list (Alexandra, Carlos, and Paolo) but a majority of the shares belong to corporations (Pentap, Mediacom, Inq Holdings, and Corinthian), so let’s check the ownership structures of each of these four owner-firms.
Pentap’s owners[10]:
Marilex’s owners [14]:
Note that based on the same General Information Sheets, one or more of the six PDI directors are also on the board of each of the corporations mentioned above.
These data show that after peeling off a sufficient number of corporate layers, Lexmedia appears to be primarily owned and controlled by the same five Rufino-Prieto directors of the Philippine Daily Inquirer.
In short, the Rufino-Prietos basically sold Inquirer-owned land to themselves.
PDI’s Rufino-Prieto directors sold PDI-owned land to Lexmedia at a mind-bogglingly low price. The sale hurt the interests of PDI shareholders, and these are the Rufino-Prieto directors plus PDI’s minority shareholders. Hence, why would the Rufino-Prietos hurt not only PDI’s minority shareholders but also themselves?
As it turns out, the only ones hurt by the deal are PDI’s minority shareholders, as Lexmedia, who bought the property at an extremely low price, is also owned and controlled by the same Rufino-Prieto PDI directors who approved the sale.
We know that the Inquirer has been hemorrhaging in as early as 2017, when declared Php 320 million in losses after tax [19]. I personally doubt that the Inquirer can get out of the red and survive, especially since the Digital Age has brought the demise of newspapers all over the world. For example, more than 20% of all newspapers in the United States have closed down since 2014 [20].
Hence, I would understand why the Rufino-Prietos would try to hedge risk by evacuating assets from an ailing company. However, what I do not understand is how they can do it without taking into consideration the interests of other company owners who do not belong to their clan.
The Philippine Daily Inquirer was born in the late 80s as an earnest attempt to create a media company that is owned and controlled not by the moneyed elite, but by journalists themselves.
Initially intended to take the form of a journalist cooperative but registered as a corporation for expediency, the Inquirer started with the hope that “all those working for it could share the responsibility and hopefully, the rewards [21].”
Inquirer even had a very peculiar by-law in its original Articles of Incorporation: that only Inquirer permanent employees can own Inquirer stocks [22].
But this by-law didn’t last long as the Rufino-Prietos took over in 1990s and established a virtual monopoly on Inquirer’s corporate decision-making.
Despite my strong reservations on the quality of Inquirer’s current fleet of journalists, I cannot deny the fact that the Inquirer was borne with the noble hope of giving journalists better lives without asking them to sell their bodies and souls to the devil.
It’s bad enough that Inquirer failed to fulfill that promise, but what makes matters so much worse is that the same people who helped create their company – the minority shareholders – stand to lose whatever little they can get in the end.
As Lexmedia and the Rufino-Prieto companies, in apparent anticipation of Inquirer’s bankruptcy declaration, cannibalize what’s left of the Philippine Daily Inquirer’s assets, what will happen to the minority shareholders, some of whom are even journalists themselves, who weren’t lucky enough to have Rufino or Prieto as a last name?
And how about the Philippine Daily Inquirer's creditors, if any? [ThinkingPinoy | RJ Nieto]
[1] Corporate Secretary’s Certificates issued for sale of parcels of lands with Transfer Certificate of Title Nos. 182449, 182450, 182451, 182452, 182453, and 182454, all in the Makati City Registry of Deeds.
[2] Deeds of Absolute Sale for lots with Transfer Certificates of Title Nos. 182449, 182450, 182451, 182452, 182453, and 182454.
[3] Transfer Certificates of Title Nos. 182449, 182450, 182451, 182452, 182453, and 182454 show they’re all registered under the Philippine Daily Inquirer.
[4] Deparment of Finance. Department Order No. 24-2017.
[5] Re/Max Regent Properties. 641 sq. m Commercial Lot for Sale in Chino Roces Avenue, Makati City. Lamudi.
[6] Re/Max Regent Properties. 511 Sq. m Commercial Lot for Sale in Makati City. Lamudi.
[7] Philippine Daily Inquirer. 2018 General Information Sheet.
[8] Tiglao, R. PDI in trouble with P400-M losses last year; plans to close print edition. Manila Times. 14 October 2019.
[9] Lexmedia Realty Inc. 2018 General Information Sheet.
[10] Pentap Equities and Holdings Corporation. 2018 General Information Sheet.
[11] Mediacom Equities Inc. 2016 General Information Sheet.
[12] Inquirer Holdings Inc. 2018 General Information Sheet.
[13] Corinthian Commercial Corporation. 2016 General Information Sheet.
[14] Marilex Realty Development Corporation. 2018 General Information Sheet.
[15] Ionian Realty and Development Corporation. 2016 General Information Sheet.
[16] LRP Incorporated. 2018 General Information Sheet.
[17] Pinnacle Printers Corporation. 2018 General Information Sheet.
[18] Granprie Realty Corporation. 2016 General Information Sheet.
[19] See #8.
[20] New York Times. More Than 1 in 5 U.S. Papers Has Closed. This Is the Result. 21 December 2019.
[21] Duran-Apostol, E. Present at creation: hysterical, historical. Philippine Daily Inquirer. 22 November 2010.
[22] Ibid.
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The decision to sell PDI land at scandalously low prices affects not just the Rufino-Prieto Family but also the minority shareholders who are not part of the PDI board that approved the sale.
PDI’s owners as of 2018 [7] show at least thirteen minority shareholders, including the veteran journalist Vic Agustin, who in October 2019 sued the Rufino-Prietos for Syndicated Estafa precisely for these allegedly onerous transactions [8].
Syndicated estafa is swindling committed by a syndicate of five or more persons. In Agustin’s lawsuit, that syndicate is the Rufino-Prietos.The preceding section showed that the Rufino-Prietos, sitting as PDI directors, sold PDI land below-market prices, resulting in financial injury to PDI as a corporation because they could’ve quickly sold the same land at a much higher price.
But then, an injury to PDI must also be an injury to the Rufino-Prietos, being that the latter are majority shareholders of PDI. That sounds contradictory, right?
Well, not if you check on who the Rufino-Prietos sold the PDI land to.
Who owns Lexmedia?
The Rufino-Prietos, acting as the agents of the Philippine Daily Inquirer, sold the six lots to Lexmedia, so that the next logical question would be who owns that company?This is a tricky question because it appears that, based on documents from the Securities and Exchange Commission, Lexmedia’s ownership structure is buried in layers upon layers of corporations.
To illustrate, Lexmedia’s ownership structure [9] is as follows:
- Pentap – 40.56%
- Mediacom – 10.19%
- Inquirer Holdings – 10.15%
- Corinthian – 2.57%
- Alexandra Prieto – 3.83%
- Carlos Rufino – 0.83%
- Paolo Prieto – 2.42%
- Others
(Note that from hereon, all mentions of any of the five Rufino-Prieto PDI directors will be highlighted in red.)
Pentap’s owners[10]:
- Granprie – 20%
- Paolo Prieto – 20%
- Alexandra Prieto – 20%
- Others
- LRP – 68.92%
- Others
- Pinnacle – 68.89%
- Others
- Marilex – 31.85%
- Ionian – 11.19%
- Macario Rufino – 5.49%
- Carlos Rufino – 5.8%
- Alexandra Prieto – 1.82%
- Marixi Prieto – 1.86%
- Paolo Prieto – 1.82%
- Others
Marilex’s owners [14]:
- Granprie – 11.43%
- Marixi Prieto – 4.28%
- Alexandra Prieto – 8.57%
- Paolo Prieto – 8.58%
- Others
- Marixi Prieto – 9.71%
- Paolo Prieto – 12.23%
- Alexandra Prieto – 12.23%
- Marilex – 14.1%
- Others
- Pentap – 29.27%
- Marilex – 31%
- Corinthian – 4.24%
- Carlos Rufino – 1.37%
- Alexandra Prieto – 5.86%
- Pentap – 69.83%
- Macario Rufino – 8.51%
- Alexandra Prieto – 4.94%
- Corinthian – 3.58%
- Carlos Rufino – 0.99%
- Paolo Prieto – 0.04%
- Others
- Marixi Prieto – 39.99%
- Alexandra Prieto – 31.98%
- Paolo Prieto – 0.01%
- Others
 |
| A diagram showing Lexmedia's corporate ownership. Each large rectangle is a predominantly Rufino-Prieto family firm. Each red rounded box is a Rufino-Prieto family member who also sits in the Philippine Daily Inquirer's board of directors. |
These data show that after peeling off a sufficient number of corporate layers, Lexmedia appears to be primarily owned and controlled by the same five Rufino-Prieto directors of the Philippine Daily Inquirer.
What’s the problem with this?
As it turns out, the only ones hurt by the deal are PDI’s minority shareholders, as Lexmedia, who bought the property at an extremely low price, is also owned and controlled by the same Rufino-Prieto PDI directors who approved the sale.
We know that the Inquirer has been hemorrhaging in as early as 2017, when declared Php 320 million in losses after tax [19]. I personally doubt that the Inquirer can get out of the red and survive, especially since the Digital Age has brought the demise of newspapers all over the world. For example, more than 20% of all newspapers in the United States have closed down since 2014 [20].
Hence, I would understand why the Rufino-Prietos would try to hedge risk by evacuating assets from an ailing company. However, what I do not understand is how they can do it without taking into consideration the interests of other company owners who do not belong to their clan.
The Philippine Daily Inquirer was born in the late 80s as an earnest attempt to create a media company that is owned and controlled not by the moneyed elite, but by journalists themselves.
Initially intended to take the form of a journalist cooperative but registered as a corporation for expediency, the Inquirer started with the hope that “all those working for it could share the responsibility and hopefully, the rewards [21].”
Inquirer even had a very peculiar by-law in its original Articles of Incorporation: that only Inquirer permanent employees can own Inquirer stocks [22].
But this by-law didn’t last long as the Rufino-Prietos took over in 1990s and established a virtual monopoly on Inquirer’s corporate decision-making.
Despite my strong reservations on the quality of Inquirer’s current fleet of journalists, I cannot deny the fact that the Inquirer was borne with the noble hope of giving journalists better lives without asking them to sell their bodies and souls to the devil.
It’s bad enough that Inquirer failed to fulfill that promise, but what makes matters so much worse is that the same people who helped create their company – the minority shareholders – stand to lose whatever little they can get in the end.
As Lexmedia and the Rufino-Prieto companies, in apparent anticipation of Inquirer’s bankruptcy declaration, cannibalize what’s left of the Philippine Daily Inquirer’s assets, what will happen to the minority shareholders, some of whom are even journalists themselves, who weren’t lucky enough to have Rufino or Prieto as a last name?
SOURCES:
[2] Deeds of Absolute Sale for lots with Transfer Certificates of Title Nos. 182449, 182450, 182451, 182452, 182453, and 182454.
[3] Transfer Certificates of Title Nos. 182449, 182450, 182451, 182452, 182453, and 182454 show they’re all registered under the Philippine Daily Inquirer.
[4] Deparment of Finance. Department Order No. 24-2017.
[5] Re/Max Regent Properties. 641 sq. m Commercial Lot for Sale in Chino Roces Avenue, Makati City. Lamudi.
[6] Re/Max Regent Properties. 511 Sq. m Commercial Lot for Sale in Makati City. Lamudi.
[7] Philippine Daily Inquirer. 2018 General Information Sheet.
[8] Tiglao, R. PDI in trouble with P400-M losses last year; plans to close print edition. Manila Times. 14 October 2019.
[9] Lexmedia Realty Inc. 2018 General Information Sheet.
[10] Pentap Equities and Holdings Corporation. 2018 General Information Sheet.
[11] Mediacom Equities Inc. 2016 General Information Sheet.
[12] Inquirer Holdings Inc. 2018 General Information Sheet.
[13] Corinthian Commercial Corporation. 2016 General Information Sheet.
[14] Marilex Realty Development Corporation. 2018 General Information Sheet.
[15] Ionian Realty and Development Corporation. 2016 General Information Sheet.
[16] LRP Incorporated. 2018 General Information Sheet.
[17] Pinnacle Printers Corporation. 2018 General Information Sheet.
[18] Granprie Realty Corporation. 2016 General Information Sheet.
[19] See #8.
[20] New York Times. More Than 1 in 5 U.S. Papers Has Closed. This Is the Result. 21 December 2019.
[21] Duran-Apostol, E. Present at creation: hysterical, historical. Philippine Daily Inquirer. 22 November 2010.
[22] Ibid.
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