Stock Commentary: MAC fills leadership vacancies with El Kapitan’s grandkids

Merkado Barkada

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October 12, 2021 | 7:01am

As reported last week, Joseph Chua was unceremoniously dumped from his directorships and management roles at Philippine Airlines [PAL 6.05 susp] and MacroAsia [MAC 5.02 1.83%], by way of a strange ad placed in the Inquirer that sought to revoke all of Mr Chua’s authority to represent any of Lucio Tan’s businesses.

That set off a firestorm of disclosures, clarifications, and speculation about what might be actually happening behind the scenes at the helm of Lucio Tan’s vast empire. At the time, I said that if Carmen Tan would use Mr Chua’s ejection to rejuvenate the short-handed boards with new professional directors and managers with valuable subject matter experience and skills, that it would be a good sign for the LTU (Lucio Tan Universe).

However, I also said that the LTU (and its investors) would continue to suffer if the vacancies were backfilled by Tan Family members. With this announcement, we have our answer. Kyle Ellis C. Tan, son of the recently-deceased Lucio “Bong” Tan, Jr., was named to MAC’s board as a director and given the role of Treasurer. Eduardo Luis Tan-Luy, son of Irene Tan-Luy, was elevated from his position as MAC’s Treasurer straight to the top as MAC’s President and COO.


MB BOTTOM-LINE

The Bilyonaryo description of Mr. Luy, MAC’s new President and COO, as a guy who “raps and sells cool merchandise on the side”, was blunt and efficient in underlining the absurdity of what is happening here in the LTU.

It’s normal for powerful families to use their companies as proving grounds for younger family members, and investors are willing to tolerate some family shenanigans; but at a certain point, that “use” can tip over into “abuse” if the placements are not in the best interest of the particular company and its shareholders.

Given the unhinged circumstances surrounding Mr. Chua’s exit and the combined youth and inexperience of the blood relatives tapped to replace him, investors should definitely re-evaluate their positions in any companies inside the LTU.

It’s not the fault of Kyle Tan or Eduardo Luy that they’ve been placed in this situation, nor is it the fault of the rumored mastermind of the moves, Carmen Tan (Lucio Tan’s first wife); Lucio Tan himself is to blame for the sorry state of his empire and the continued mistreatment of its shareholders.

Lucio Tan failed to take the necessary steps to provide shareholders with an orderly, and ultimately positive, transition of power from one generation to the next. Instead of carefully grooming successors and building a vast stable of competent professional managers, Lucio Tan took the selfish and easy path, which is to say: he did nothing.

Now, Lucio Tan is in full decline and the dwindling treasures of his empire are (naturally) coming under attack by various factions of his large and messy family structure.

As an onlooker, I’m untouched by these missteps and only document them as interesting curiosities, but if I were a shareholder I’d be livid. What a waste.

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Merkado Barkada’s opinions are provided for informational purposes only, and should not be considered a recommendation to buy or sell any particular stock. These daily articles are not updated with new information, so each investor must do his or her own due diligence before trading, as the facts and figures in each particular article may have changed.



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