MANILA, Philippines - The Supreme Court (SC) will hear oral arguments on the case involving the extent of foreign ownership of telephone giant Philippine Long Distance Telephone (PLDT) Co. at 2pm today.
The case is in connection with a petition filed by PLDT stockholder Wilson P. Gamboa against former Finance chief Margarito Teves, and several others. Gamboa claimed that foreign ownership of PLDT between 2003-2005 was already at 60 percent, a violation of the 40-percent ceiling mandated by the 1987 Constitution.
In an en banc advisory, the high court announced that each party will be given a maximum of 20 minutes to present their respective arguments on the following issues:
- whether the term "capital" in Sec. 11, Art. XII of the 1987 Constitution refers only to shares of stock with the right to vote in the election of directors (common shares) or to all kinds of shares of stock;
- if the term "capital" refers only to shares of stock with the right to vote in the election of directors, will this have any retroactive effect to affect such shares owned by foreigners prior to such ruling; and
- whether PLDT and its foreign stockholders are indispensable parties in the resolution of the legal issue on the definition of the term "capital", and if so, whether the high court has acquired jurisdiction over the persons of PLDT and its foreign stockholders.
In a Decision dated June 28, 2011, the Supreme Court held that the term "capital" in Sec. 11, Art XII of the Constitution refers only to shares of stock entitled to vote, in the subject case, only to common shares "and not to the total outstanding capital stock (common and non-voting preferred shares).
The high court also directed the Securities and Exchange Commission (SEC) to determine whether PLDT committed a violation on the constitutional provision which limits foreign ownership of domestic public utilities to 40-percent, applying this definition of the term "capital."
PLDT and its chairman Manuel Pangilinan filed a motion for reconsideration (MR). PLDT claimed that Gamboa's mandamus suit was infirm as there was no neglected duty alleged of the SEC. PLDT further argued that it is the Executive branch that decides how to interpret and apply the term "capital" in the Constitution.
The SEC also filed its own MR citing a "procedural defect" even as it said it agreed with the "substantive aspect of the Decision." The SEC said that respondent former SEC Chairperson Fe Barin was no longer the head of the agency, and the commission, as a collegial body, was not impleaded in the case.