Philippine Journalista Case Study

Case Study #12

Philippine Journalists

Incorporation

Submitted by:

Dela Rosa, Robie Rosslyne M.

Submitted to:

Prof. Lacerona

BMG 114 MWF 9:30-10:30

Philippine Journalists Incorporation

The Philippine Journalists Incorporated (PJI) is the publishing company for The Journal Group of Publications, namely: The Journal, People’s Journal, People’s BagongTaliba, People’s Journal Tonight, Women’s Journal Magazine, and The International Editions thereof. It was incorporated on October 20, 1972 shortly after declaration of Martial Law, with an authorized capital of P500, 000, consisting of 5, 000 common shares with par value of P100 each. From the original incorporators Eduardo Ongsiako, Ricardo Torres, Julie Yap Daza, Manuel Salak, Augusto Villanueza and Reynaldo Naval, it is now incorporated by the present stockholders namely Rosario Olivares and the 14 dummies or agents of Benjamin Romualdez, PCGG/National Government, Rosario Olivares and 8 dummies or agents of Benjamin Romualdez, Luisa Linsangan, and Capital City Realty Development Corporation. This case has been based on the point of view of the chairman of the board and chief executive officer of PJI (Sgd) Eduardo B. Olaguer that the privatization of the company from the standpoint of the government economic recovery should enjoy priority over the recovery of sequestered shares as ill-gotten wealth. As of March 31, 1988, the capital deficiency has been reduced to 92.7 million resulting from profitable operations and with a much improved liquidity position despite the heavy interest burden on the DBP loans.

I. Objectives

• To know how will the government will privatize the Philippine Journalists Inc.
• To recover the DBP Loan exposure that results to capital deficiency
• To be able to balance the assets that will lessen the company’s liabilities

II. Central Problem

What will the government do to privatize the PJI and for the company to recover the DBP loan exposure which is due to violation of Anti-Graft and Corruption Practices Act?

III. Areas of Consideration (SWOT Analysis)

Strength

1. Having a brand new printing press
2. Recovery from the loss they incurred
3. Have a right over “Block 173”
4. Can publish journal not only locally but also internationally

Weaknesses

1. Spreading of the public information was controlled by the government
2. It take a years to issue a stock certificate
3. Poor management
4. No control in the disbursement of funds

Opportunities

1. Can bring the government closer to the people
2. Development in technology of the company
3. Trust earned by the public

Threats

1. On going litigation about the separation of the shares
2. Closing of the lease where the company is dependent
3. Public distrust of the government information

IV. Alternative Courses of Action

1. PJI can resume the remittances to National Government instead of DBP as their partial payment to their loans on DBP until fully settled.

Advantages:

• They can settle their loans from DBP

Disadvantages:

• It may take year before they can settle the loan

1. Extra-judicial foreclosure of the mortgaged printing machinery as recommended by the Asset Privatization Trust.

Advantages:

• PJI can settle their loan to DBP

Disadvantages:

• They need to lessen the number of their employees who are not productive
• The printing machineries are fixed to the land which means they need to destroy it

1. The National Government through PCGG can sell its creditor’s right to the highest bidder.

Advantages:

• They can also settle their loan to DBP
• PCGG will retain its control over PJI
• PCGG can delegate representative of the buyer to be one of the new PJI’s Board of Directors

Disadvantages:

• Can take log time to prepare the documents needed

V. Strategy Formulation/Recommendation

I therefore conclude that the best solution to the problem is alternative course of action number 3 because aside privatization by the National Government, PCGG is the principal creditor of the PJI and because of that, the sequestration of the shares will be done because these shares are said to have a negative book value.