The Philippine Stock Exchange has given diversified conglomerate and listed San Miguel Corp. 24 hours to explain in writing why it should not be penalized for violating the bourse's disclosure policies.

The stock exchange issued a show cause order to San Miguel on Wednesday where disclosure department head Pete Malabanan wrote that San Miguel "failed to provide the exchange with all the information requested" on an option agreement that gave San Miguel an indirect and layered 50.1 percent stake in Petron Corporation.

The 2-year $10 million-worth option agreement was between San Miguel and one of the 2 local units of Petron's majority shareholder, Ashmore Group.

While Ashmore technically owns 90.57 percent of Petron, San Miguel officials already clinched key Petron posts, including the board chairmanship.

This prompted Petron's minority shareholders to question whether the option agreement--in substance--already handed over control of the country's largest oil refiner and retailer to San Miguel.

If this was the case, the minority shareholders said San Miguel's option agreement with Ashmore's unit was a way to get around the tender offer requirement, which could make the deal very expensive to the food, drinks, power, telecommunications conglomerate.

Francis Lim, in a text message to abs-cbnnews.com/Newsbreak last week, called the San Miguel case "peculiar," and was set to defer to the Securities and Exchange Commission's interpretation of the case.

Nonetheless, the stock exchange said that it earlier asked San Miguel for a copy of the option agreement to determine its substance.

The stock exchange's Malabanan cited disclosure requirements of the exchange, particularly sections 1, 2 and 4.3 of the revised disclosure rules, which San Miguel could have violated when it snubbed the stock exchange's request.

Malabanan said the rules essentially mandate listed companies to comply with the disclosure requirements of the exchange and promptly make available all information, through the submission of structured and unrestructured disclosures that would enable a reasonable investor to determine whether to buy, sell or hold securities or in connection with the exercise of related voting rights.

Confidential

San Miguel confirmed that it has received the stock exchange's show cause order.

In its disclosure on Tuesday, San Miguel said it could not give the bourse a copy of its option deal since it was bound by a confidentiality agreement.

It said the other party, SEA Refinery Holdings BV, is not a listed company and has no disclosure obligation to the local stock exchange.

The company said, "Should [San Miguel] be compelled to provide the PSE with a copy of the agreement, it will be violating its contractual agreement with SEA B.V."

It also said the stock exchange is not a government office, so "a directive from the PSE compelling SMC to provide a copy of the Option Agreement...would not constitute a legal justification for the violation of SMC’s confidentiality agreement with SEA B.V.