PLDT can still prove Filipinos own it - SC
MANILA, Philippines - The largest telecommunications firm in the country can still prove its claim that it is owned and controlled by Filipinos -- and not by foreigners -- by presenting its case before the Securities and Exchange Commission, the Supreme Court said in a resolution dated October 9.
The High Court said the Philippine Long Distance Telephone Co. can provide evidence to the SEC that it did not violate the 60-40 ownership rule in the 1987 Constitution, which bars foreigners from owning over 40% of a public utility.
The firm has been in hot water because it allegedly violated the said rule when Hong Kong-based First Pacific Ltd increased its stake in PLDT to 37% from 30.7%. Late PLDT stockholder Wilson Gamboa said in his petition before the SC that this raised the stake of foreigners in the company to 81.47%.
In 2007, First Pacific, through affiliate Metro Pacific Assets Holdings Inc, acquired 111,415 shares owned by government in Philippine Telecommunications Investment Corp (PTIC), which in turn owned PLDT. The acquisition was equivalent to a 6.4% indirect stake in PLDT.
PLDT has argued before the SC that it did not violate the ownership rule because capital covers both the common shares or shares entitled to vote in the election of directors, and preferred or non-voting shares. But the SC, in its October 9 ruling and earlier decision in June 2011, said otherwise: capital only refers to common shares.
The SC, however, in the October 9 resolution penned by Justice Antonio Carpio, clarified that the questions on whether the said sale to First Pacific went beyond the constitutional limit and if the total percentage of the PLDT common shares complies with the 60-40 ownership rule are issues that could best be addresed in SEC proceedings.
"These issues indisputably call for an examination of the parties’ respective evidence, and thus are clearly within the jurisdiction of the SEC. In short, PLDT must be impleaded, and must necessarily be heard, in the proceedings before the SEC where the factual issues will be thoroughly threshed out and resolved," the SC said.
The High Court stressed that this only shows that PLDT will not be deprived of its right to due process, a fear raised by tycoon Manuel V. Pangilinan, who represents the First Pacific Group in PLDT.
Pangilinan said this in his motion for reconsideration on the SC ruling in June 2011. In the said decision, the SC said that capital refers to "capital" as '"shares of stock entitled to vote in the election of directors" or common shares, and not as total outstanding capital stock, which covers both common and non-voting preferred shares.
Pangilinan said that if the High Court affirmed this decision, it would result in "economic suicide" because it would scare investors away.
The SC said however that it only defined the term "capital" in its decision and directed the SEC to probe if PLDT did violate the ownership rule or not.
Those who concurred with the decision are Chief Justice Maria Lourdes Sereno, Justices Martin Villarama Jr, Jose Perez, Jose Mendoza, Justices Teresita Leonardo-De Castro, Arturo Brion, Diosdado Peralta, Lucas Bersamin and Mariano Del Castillo.
Justices Presbitero Velasco Jr, Roberto Abad, and Bienvenido Reyes dissented, while Justice Estela Perlas-Bernabe inhibited because she handled a related case as a judge in Makati. - Rappler.com