FIRST Gen Corp. minority shareholder Joseph Alvin Tan has asked the company’s board to disclose documents related to its transactions with Prime Infrastructure Capital Inc. (Prime Infra), citing concerns over provisions tied to possible changes in management control.
In a May 22 letter, Tan requested copies of board meeting minutes, committee discussions and supporting documents covering the approval of First Gen’s investments in Prime Infra’s power generation assets.
Tan said the agreements allegedly contained “key man” or “change of control” provisions that could expose the Lopez-led firm to substantial financial risk if its current chief executive officer were replaced.
The shareholder claimed that under the agreements, Prime Infra may acquire First Gen’s equity interests in certain power assets at a discount of around 25 percent in the event of a management change.
He also cited a reported P25-billion standby letter of credit facility that could trigger default provisions if control of management changes.
“The aggregate financial exposure arising from these twin clauses has been estimated at up to P24 billion,” the letter stated.
Tan questioned whether the provisions had been fully disclosed to the board prior to approval and whether the directors had properly evaluated the risks and implications of the transactions.
He also raised concerns on compliance with related-party transaction rules and disclosure requirements.
The shareholder asked the company to provide copies of board papers, fairness opinions and legal memoranda related to the transactions within 10 business days from receipt of the request.
Tan said that failure to address the request could compel him to pursue “all remedies available” under applicable laws and regulations.
First Gen shares added P0.04, or 0.25 percent, to close at P16.00 each on Monday.
