Hi! I am Nina Lasala, former Treasurer of the Philppines. This blog is meant to be an open forum for investors, fellow finance professionals, and other interested parties to discuss the state of Philippine Debt Management.

Thursday, March 03, 2005

Corporate Governance and PDS Holdings

As I was looking at the tabulation of shareholders of PDS Holdings, several ideas came up which certainly could stand rigorous examination:

I. The business proposal was crafted initially by BAP and IHAP.

IHAP now has a measly 2.53% stake in the business. But then again, IHAP did have a position paper against 392. Is this a lack of faith on their part?

II. The IT vendors are 20% equity holders.

a) Who will govern the IT audits in the future?
b) What safeguards are in place to ensure that cheaper 3rd party solutions are identified which may compete or completely replace the vendors' offerings;
c) Isn't the FIE a technology game? What incentive would a 3rd party solution provider have if the entrenched IT vendor has a right of first refusal or a right to match? What incentive would a 3rd party vendor have if his bright idea is swiped right after he makes a presentation to PDS Holdings?
d) Isn't FIE held hostage to the IT vendors?

I wish to clearly state that I have no axe to grind with the specific vendors but am just asking these questions as a matter of general principle. Should vendors whose products are strategic to the success or failure of the business hold equity in the first place?

11 Comments:

Anonymous Anonymous said...

well, perhaps they used up their money on the fancy cars that they forgot to leave some to pay off their IT vendors! Sans cash, they paid it all off with equity. Really slick!

These people are oblivious to the conflicts of interests that come with giving equity to suppliers. Not that I am accusing Tata or Compushare of incompetency, but if the time comes that a better supplier comes along, how can you boot out a fellow shareholder?

Great going FIE! This is a great case study on mismanagement!

9:48 PM

 
Anonymous Anonymous said...

Best practices around the world dictate that an exchange should not be biased to one vendor. An exchange, for it to be truly effective and efficient should provide an open access interface to which other vendors can connect to. All information vendors who wish to devote resources then to this project can participate. This way, banks or brokers can choose which vendor they want to choose to be able to transact. The exchange should not ram an "exclusive" solution down the throats of participants.

If for instance Bloomberg, Reuters or Moneyline choose to develop something that connects to the FIE, banks can just use their existing terminals to send orders to the exchange. No need to shell out an extra $1,000 or so.

An exchange should never depend on earnings from the sale/use of its trading platform. Its main revenue should be from trading. If it relied mainly on its revenues from the terminals, it might as well have been incorporated as an IT company.

10:26 AM

 
Anonymous matanglawin said...

Sa aking pagkakaintindi sa presentation ng PDS Holdings, mayroong apat na companya na napapaloob dito:
Philippine Dealing and Exchange (PDEC), Philippine Depository & Trust (PDTC), isang securities clearing corporation (SCC), at ang IT company.

PDEC ang nagtatatag ng isang 'Fixed Income Exchange'.

PDTC ang 'attempt' ng PDEC na makilahok bilang 3rd party custodian.

Ang securities clearing corporation ng PDEC ang gagarantiya sa mga transaction na dadaan sa PDEC, upang siguraduhing walang 'failed trades'.

Ang IT group ang infrastructure company nila na susuporta sa PDEC, PDTC at SCC.

Sa ganang akin, mahala ang pagkakaroon ng isang mahusay na technology partner para sa isang exchange. Hindi negisyo ng exchange ang maging IT company, negosyo nito ang pagpapalawag ng kalakalan at partisipasyon sa isang maayos na fixed income market. Ang mahalaga sa technology plan ng isang exchange ay ang pagpapatupad ng mga alituntunin upang mag-connect ang iba't-ibang systema na 'off-the shelf' o 'proprietary'. Tulad ng PSE na may CORE system, bukas ito sa 'system of choice' ng mga brokers na kumonekta sa pamamagitan ng 'computer-to-computer' interface.

Sa unang pagbasa ng kontrata ng PDEC, hindi sila pumapayag na gumamit ng sariling computer ang trading participant. Pinabibili nila ng 'branded' PC ang tarding participant mula sa kanilang preferred vendor. Hindi lang yon, tinatali ng PDEC ang trading participant sa isang 2-year contract na ang kabayaraan ay US dollars.

Kung sa loob ng 2 taon, natauhan ang trading participant at hindi na naising ituloy ang paggamit ng terminal sa buong 2 taon, pinagpapayad pa rin ang trading participant ng fees para sa mga buwan na natitira sa 2-year contract. Hindi ba't di makatarungan ito!

8:37 AM

 
Anonymous Anonymous said...

bilib sana ako sa inyo kaya lang parang panay bastusan na lang ans site niyo.

Parang paninira na lang. Hindi na Christiano. Hindi na intelligent discussion. Pati cars ng ibang tao pinakikialaman.

May nagtatanung din kung magkano nakukuha ng TOP and DTOP sa Moneyline para solo nila business? Sa Deutsche kaya may nakukuha din?

Nagtatanong lang. Turned off na kasi ako kala ko intelligent exchange of ideas lang ang site na to!

10:37 PM

 
Anonymous Anonymous said...

Reaction to the preceding anynymous.... Alam ko na kung kaninong line yang 'may nakukuha sa Moneyline kaya ayaw sa PDEx at PDTC'. Ganyan ang taktik ng taong walang ilalabang isyu kaya namemersonal na lang. Hindi naman obvious na taga PDTC or PDEx ka! Obvious na obvious lang! Hija or Hijo out of order ka! Eh matanong naman kita, may jaguar ka rin ba? Sagutin mo ang isyu, kung wala kang isasagot tumitig ka na lang sa pader. This site is for intelligent people only and not for you! Gets mo? O, namersonal ka kasi kaya penersonal ka rin! Pustahan tayo walang mangyayari dyan sa third party custody o!

9:02 PM

 
Anonymous Anonymous said...

Ay nag-react, mukhang guilty. i'm sure meron ngang nakukuha hanggang ngayon.

Please lang hindi ako taga mga kumpanyang iyon. Mahirap lang ako at definitely hindi corrupt.

Obvious naman ikaw kaya mo pinaglalaban ang moneyline dati pa wala pa si lasala.

Bato-bato sa langit tamaan wag magagalit.

7:26 PM

 
Anonymous Anonymous said...

To the above anynymous "ay nagreact..."

Hehehe, ikaw ang tinama-an ng bato. Taga PDES ka, aminin mo na, hija!

1:28 PM

 
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2:59 PM

 

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