First Gen penalized by PSE for violations tied to Lopez feud

MANILA, Philippines – The Philippine Stock Exchange (PSE) has sanctioned First Gen Corp. for violating multiple disclosure rules, adding to the Lopez family’s leadership dispute.

In a notice dated July 9, the exchange said First Gen violated Sections 1, 2, 4.1, 4.2, 4.3, 4.4(u)(ii) and 16, Article VII of its Consolidated Listing and Disclosure Rules.

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However, the PSE did not disclose the specific penalty imposed. Under its disclosure rules, the PSE issued the notice to publish the penalties imposed on listed companies that fail to meet disclosure requirements.

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The sanctions come after months of scrutiny over First Gen’s multibillion-peso deals with Enrique Razon-led Prime Infrastructure Capital Inc.

The issue later became central to the Lopez family’s power struggle, with relatives seeking to oust First Gen president and CEO Federico “Piki” Lopez arguing that the company failed to promptly disclose provisions that could expose it to significant losses if management changed.

The dispute centered on the change-of-management-control clauses in First Gen’s transactions with Prime Infra.

The Lopez majority opposing Piki claimed the provisions could let Prime Infra acquire certain assets at discounted prices if management changed, potentially costing the company billions of pesos.

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First Gen did not disclose the clauses when it first announced the transactions in February. It first acknowledged the provisions in April after the PSE sought clarification, before submitting additional disclosures in May explaining the contractual terms.

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Throughout the dispute, First Gen said it included the provisions in its original agreements with Prime Infra to protect its investment partner in the event of a change in management, not to disadvantage shareholders. /pai INQ

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