MANILA - The Securities and Exchange Commission has no jurisdiction to determine fraud, a faction of the Medical City said Saturday after the regulatory agency nullified its majority acquisition of shares due to "fraud."
In a statement Thursday, the SEC said it voided the acquisition of shares by Viva Holdings, Viva Healthcare, Fountel and Felicitas Antoinette in Professional Services Inc (PSI), the operator of TMC.
It also penalized the group for violating the mandatory tender offer rule and committing fraud in taking over PSI.
But the group of Jose Xavier ‘Eckie’ Gonzales, nephew of former CEO Alfredo Bengzon, a former Health Secretary who has been fighting Gonzales’ boardroom coup at the SEC and in court, said the SEC does not have jurisdiction to determine fraud.
"Lawyers have also pointed out the SEC has no jurisdiction to determine fraud. Unlike court decisions, which have trials and opposing counsels that allow judges to fully understand the information presented, the SEC decides a case based only on select interviews and paperwork," the group said in a statement.
The SEC decision puts the country's COVID-19 response "at risk," it added, citing shortage of healthworkers and delay of some P750 million in payments by PhilHealth.
"Our healthcare workers continue to deliver world-class healthcare to the Filipino public during this time of COVID, even as we work to ensure that our nation-wide operations are not disrupted due to the glaring errors in the SEC decision,” Gonzales said.
"For example, where in the law, or even in any other case, can you see the SEC telling a private corporation how to classify shares, how these shares should be sold, and when these shares can be paid? It’s almost as if they were preparing the way for a favored party to buy shares of TMC," he added.
Bengzon's camp had welcomed the SEC decision saying it upholds the interests of TMC and its shareholders.
"This decision rectifies the illegal dilution brought about by the fraud, resulting in substantial financial gain and restoration of control to the legitimate shareholders of The Medical City (Professional Services Inc, “PSI”)," said Eric Puno, Bengzon's lawyer.