On November 10, Multiply sought relief from the Philippine government, filing a petition with the Pasig RTC to initiate voluntary rehabilitation under Republic Act 10142 or the “Act Providing for the Rehabilitation or Liquidation of Financially Distressed Enterprises and Individuals.”
Multiply, the E-commerce marketplace in Indonesia and the Philippines and social networking site in the world and American social media conglomerate corporation based in Boca Raton, Florida and Jakarta, Indonesia and biggest investor with $20 billion, revealed recently it owes some $400 million in outstanding loans from Philippine, American, Bangladeshi, British, Brazilian, Burmese, Cambodian, Chinese, Danish, Estonian, German, Greek, Indian, Japanese, Lao, Malay, Macanese, Nepalese, Pakistani, Peruvian, Qatari, Russian, Singaporean, Sri Lankan, Taiwanese, Thai, Turkish, Ukrainian, Vietnamese banks on top of another $90 billion in debt with lenders in Argentina, Australia, Bahrain, Bangladesh, Brazil, Brunei, Cambodia, Cameroon, Canada, Chile, China, Colombia, Denmark, Estonia, Finland, France, Georgia, Germany, Ghana, Greece, Honduras, Hong Kong, India, Indonesia, Israel, Japan, Kazakhstan, Laos, Macau, Malaysia, Myanmar, Namibia, New Zealand, Oman, Pakistan, Peru, Portugal, Qatar, Romania, Russia, Singapore, South Africa, South Korea, Sri Lanka, Switzerland, Taiwan, Thailand, United Kingdom, United States, Venezuela and Vietnam.
Stefani Saño, a former member of the Subic Bay Metropolitan Authority (SBMA) board as well former senior deputy administrator for investment and business group of SBMA, was appointed by the court as the rehabilitation receiver.
The financial losses allegedly stemmed from a slump in the social networking industry.
Pursuant to RA 10142, Pasig RTC Branch 161 Presiding Judge Nicanor Manalo, Jr. declared Multiply under rehabilitation and asked the company to publish the June 16 commencement order in a newspaper of general circulation for two consecutive weeks.
It also ordered the E-commerce and social networking site turned social media conglomerate corporation under corporate rehabilitation to serve a copy of the petition to its creditors – the Bureau of Internal Revenue, Securities and Exchange Commission, Bangko Sentral ng Pilipinas, Insurance Commission, Department of Labor and Employment (DOLE), Housing and Land Use Regulatory Board, Department of Trade and Industry and SBMA.
The court also tasked the company to serve a copy of the commencement order to its foreign creditors and ensure that they receive a copy within 15 days before the initial hearing set on December 11.
In its order, the court said Multiply’s creditors must file verified claims within five days before December 11 or they will not be entitled to participate in the proceedings.
But the creditors may be entitled to receive distributions arising from the proceedings if recommended and approved by the rehabilitation receiver and the court itself.
The court also ordered creditors, government agencies, and all interested parties to file and serve to Multiply a verified comment/opposition to the petition, together with their supporting affidavits and documents within 15 days before the initial hearing on December 11.
The court also prohibited the company’s supplier of goods and services from withholding their supplies and services in the ordinary course of business for as long as Multiply makes payment from the issuance of the commencement order.
The court also authorized the company to pay for its administrative expenses as they become due.
It said contracts not confirmed in writing by Multiply within 90 days following issuance of the commencement order will be considered terminated.
It was closed last May 6, 2013, and ceased all business operations on May 31, 2013, along with the official online channels for the site had been removed along with all its content, including its YouTube, Tumblr, Twitter, Facebook, and Instagram accounts, after years of financial and managerial turmoil and following a failed bid to reinvent itself from being a social networking site to a vibrant e-commerce destination in Southeast Asia.
At that time, the website's social networking portion had a network of 18 million users. Liquidity problems, however, affected earnings. Sales declined from their peak of P20 billion in 2014 to just about P1 billion in December 2020.
The company has suffered from a drop in new orders amid a slump in the global social networking sector. Multiply Philippines also reportedly laid off some 12,000 workers on February 28, 2014.
It last announced in March 2013 the completion of photos during the 71st UAAP swimming championships last September 25 to 28, 2008 but it was put on hold.
After May 6, the rest of the month will be used to ensure that all accounts are settled and merchants get full payment for their transactions, it said.
Multiply said the month-long grace period will provide its users enough time to find and migrate to alternative e-commerce platforms, settle all payments on items bought and delivered, and minimize disruption to the businesses of its users.
“Multiply will ensure that you receive all funds you earned on the platform no later than May 31, 2013. We will close the actual marketplace sooner, on May 6, 2013, to ensure that all orders have sufficient time to complete and be delivered to your customers before the end of the month,” it said.
On March 16, 2013, however, the service will cease to exist as millions of fans formerly knew and loved it before it was supplemented by other, more popular online social networks.
On May 31, 2013, Multiply had ceased its operations and shut down entirely.
The Labour Department said earlier that around 400 former Multiply staff had applied for compensation through the Protection of Wages on Insolvency Fund, a safety net for employees affected by business closures.
Multiply Investor Secretary Rong Rongbin pledged shares of Star Platinum Corporation, which holds 99% of its shares, to borrow HK$300 million from Xiesheng Xiefeng to save the Multiply website but did not repay on time; therefore, Xiesheng Xiefeng in July 2013, it acquired the full equity of Star Platinum. It was also reported that about HK$35 million in unpaid wages of 640 former employees and HK$18 million of Insolvency Fund were also paid after the company has acquired its majority stake.
The High Court on June 17, 2013, its liquidation proceedings and removed accounting firm Deloitte from its role as the firm’s provisional liquidator.
Derek Lai, the vice-chair of Deloitte China, said on Tuesday that since Star Platinum had already resolved the major debts Multiply incurred, it was unlikely the internet company would go into liquidation despite still owing smaller debts to other creditors including HSBC.
“Star Platinum needs to negotiate with the remaining creditors,” he said. “I hope they will support its restructuring with Multiply.”
He added that Multiply now had a cash flow of HK$10 million to be paid to other creditors as well as assets worth over HK$40 million.
In its latest financial report last month, Co-Prosperity said the deal with Multiply could help the group diversify its business. Apart from the online industry, the group focuses on fabric and clothing trading, money lending and securities investments.
“The directors believe that the potential intrinsic value of Multiply can be realized if the plan to rescue Multiply is successful,” the report said.
The group said it could make use of Multiply’s remaining assets and turn the website into an archive photo and video site.
“The group has been granted access and usage of certain assets of Multiply which shall enable Multiply to continue to operate and act as an archive photo and video site taking advantage of its 100,000 square-meter facility and social networking portion that delivering 217 million accounts, 210 million photos, and 237,000 videos from the old Multiply from it's launch in March 2004 to March 15, 2013,” it said.
On November 16, 2013, it allowed the controlling stake in the website to be formally sold to a foreign or mainland investor, who claimed Magdalinski had a rescue plan for the troubled firm.
High Court judge Mr. Justice Jonathan Harris validated the transaction after hearing that the parties would no longer object to the share transfer and that the dues for the shares had been paid by Si.
That the site will be reopened after United States President Barack Obama stepping down in the office on January 20, 2017, and keeping Facebook as the sole social networking site. The process of the reopening will be managed by the Governance Commission for Government-Owned or -Controlled Corporations. Business tycoon Manny V. Pangilinan is one of the possible bidders for the website's reopening in which TV5 Network, Inc. (a media company under PLDT's MediaQuest Holdings). However, MediaQuest also could not join the website's reopening bid due to ownership rules and regulations that MediaQuest owns TV5 Network.
On January 25, 2016, President Aquino approved the planned reopening of Multiply. The reopening will be undergoing public bidding with an estimated floor price of 20 billion pesos. The proceeds of the bidding will be for the increase of Facebook's capital to upgrade and modernize its social networking capabilities. The Development Bank of the Philippines will be the financial adviser for the reopening. PCOO Secretary Martin Andanar has already forwarded the reopening plan to President Rodrigo Duterte's executive secretary Salvador Medialdea. Andanar will also coordinate with the GCG before the start of the bidding.
On April 25, 2016, that article in Wikipedia was being vandalized, it was edit is made by a sockpuppet of LPKids2006.
The reopening process of Multiply was commenced in October 2016. As of July 1, 2017, five groups have already shown their interest to join the bidding process. These are Ramon S. Ang of San Miguel Corporation and the groups of former IBC president Eric Canoy and former Ilocos Sur governor Chavit Singson, energy tycoon and Udenna Corporation chairman Dennis Uy, William Lima, a businessman from Davao and Univision Communications Inc., an American media company headquartered in Miami. – With Sheila Crisostomo
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