SEC files MR on SC PLDT ruling

by Ina Reformina, ABS-CBN News

Posted at Jul 18 2011 12:21 PM | Updated as of Jul 19 2011 01:06 AM

MANILA, Philippines - The Securities and Exchange Commission (SEC), through the Office of the Solicitor General (OSG), filed a motion for reconsideration (MR) on the Supreme Court (SC) ruling directing former SEC chairperson Fe Barin to determine the extent of foreign ownership in Philippine Long Distance Telephone Company (PLDT).

In a 14-page motion filed on July 15, the SEC asked the high court to "cure a procedural defect" even as it said it agreed with the "substantive aspect of the decision."

The SEC pointed out that Barin's term expired on April 12, 2011 which makes her unable to comply with the high court's order.

The SEC said that while Barin was impleaded as former chairperson of the commission, the SEC itself was "never impleaded as a body or as an office."

"The SEC is a collegial body and cannot discharge its official functions through its individual officers, much less, through an officer who has retired from government service," the motion read.

"Jurisdiction over the SEC as a party then can only be obtained by impleading the office itself and via service of the Honorable Court's coercive process on the SEC."

Assuming, for the sake of argument, that the SEC was properly impleaded in the case, the commission pointed out that the high court "should have made a finding that petitioner (Wilson P. Gamboa) failed to exhaust his available administrative remedies before the SEC."

The SEC said Gamboa never filed a complaint before it in order to compel PLDT to make the necessary disclosures as to its foreign equity and neither did Gamboa formally ask the SEC to suspend or revoke PLDT's franchise or certificate of registration.

This, the SEC said, renders Gamboa's petition before the high court premature.

"Except for his sweeping and general statement that 'there is no other plain, speedy and adequate remedy in the ordinary course of law,' petitioner did not advance any particular compelling reason for disregarding the SEC's primary jurisdiction over his cause of action," the motion read.

"Petitioner's failure to bring these matters to SEC's attention naturally denied it (SEC) the opportunity to pass upon these matters at the first instance. Thus, the SEC cannot be justly accused of having 'unlawfully neglected' to perform its statutory duty."

The motion, meantime, pointed out that the OSG agrees with the high court's ruling that the term "capital" in Section 11, Article XII of the 1987 Constitution refers only to shares of stocks entitled to vote in the election of directors and in the case of PLDT, its common shares and not its total outstanding capital stock.

In its decision, the high tribunal directed Barin to apply this definition of "capital" in determining the extent of foreign ownership in PLDT, and to impose appropriate sanctions under the law if it is found that Section 11, Article XII of the Constitution has been violated.

The Constitution prescribes a 40% foreign equity limitation in public utilities, the main bulk of 60% of the capital must be Filipino-owned.

The SC ruling cited information based on PLDT's General Information Sheet that state foreigners hold 120,046,690 common shares of PLDT or 64.27% whereas Filipinos hold only 66,750,622 common shares or 35.73%.