Less than a month after a mining incident in one of its sites, listed Benguet Corp. is facing complaints from its own shareholders who raised transparency issues on the mining firm's operations and financial performance.

Benguet Corp shareholders George Coca and Janzen Marquez earlier wrote a five-page letter to the stock exchange accusing Benguet Corp. of allegedly "withholding material information" that bear on the firm's financial capability to conduct and maintain its mining operations.

In their complaint, the shareholders said that among the material facts that the company failed to disclose to the Philippine Stock Exchange (PSE) are the substantial delays in its projected financial benefits of the Sta. Cruz Nickel Project in Zambales and the civil and criminal cases filed by local provincial officials against Benguet and its directors.
 
The shareholders also claimed that Benguet allegedly wrongly disclosed in its 2007 annual report released last April 2008 that Citigroup remained to be the financial advisor for the mining firm’s King-king copper porphyry project. However, the mandate of Citibank over the project officially expired as early as March 2007, based on a letter sent to the Benguet shareholders by Nationwide Development Corporation (Nadecor), the claim-owner of King-king.
 
King-king is Benguet’s largest mining prospect and is among the country’s top five priority mining projects.

Nadecor terminated its operating agreement with Benguet last August 29, 2008 and formally requested for arbitration with the environment department on September 15, 2008.

Compliant

Benguet Corp.'s legal counsel, Atty. Rey Mendoza, belied these complaints and stressed that the company has been fully compliant with the PSE and Securities and Exchange Commission's disclosure requirements.

He said, the "alleged" shareholders should have brought the matter directly to the company, instead of escallating "such a small matter" to the PSE and the media.

"It is unfortunate that these alleged stock holders would go straight to the PSE, when they could have raised their concern straight to the company," he said.

"Some minority shareholders already brought up the matter of transparency of financial performance to the PSE two months ago, and we already resolved that. That is already sufficient," Mendoza said.

Disclosure requirements

Mendoza explained that the company does not disclose information about operations, especially if the details are not final yet.

"This is in the disclosure requirements of the PSE and SEC. We don't want to mislead or investors. But if the information is final, we publish it," Mendoza explained.

Mendoza also doused allegations that the company is facing bankruptcy, citing that the company has survived for 105 years.

"We have survived many crises already. In fact, some major shareholders reflected their confidence by putting in a P500 Million capital infusion."

Mendoza said Benguet Corp is waiting for the PSE to decide on the shareholders' complaint. "It's up to the PSE to determine whether there is substance to their complaints, assuming they are really our shareholders"

He admitted, however, that both Benguet and Nadecor are trying to settle their dispute out of court.

"There are differences between Benguet and Nadecor, but we are pursuing a non-legal settlement over the issues. We are just waiting for the schedule of the next meeting.  We believe that a mutually-beneficial option can be reached moving forward."