Corona borrowed P11-M from ‘dissolved’ firm

Rappler.com

This is AI generated summarization, which may have errors. For context, always refer to the full article.

But senators say a revoked license does not automatically 'kill' a corporation

MANILA, Philippines – A family corporation that Chief Justice Renato Corona said lent him P11-M for the purchase of a lot was dissolved in 2003, the same year that Corona reportedly borrowed from it.

Taking the witness stand on Day 10 of the Corona impeachment trial, Benito Cataran of the Securities and Exchange Commission (SEC) revealed that the SEC revoked the license of the Basa Guidote Enterprises Inc (BGEI) on April 22, 2003.

The Chief Justice has declared in his Statement of Assets, Liabilities and Net Worth (SALN) that he borrrowed P11-M in 2003 from BGEI, of which his wife Cristina, he said, is a shareholder, to purchase a 1,200-sq-m lot in the posh La Vista subdivision. The Coronas bought the lot for P11-M.

In subsequent years, Corona declared a reduction in his P11-M liabilities, an indication he was paying his loan to BGEI.

Cataran said that the revocation of BGEI’s incorporation resulted from the company’s failure to file any report since 1991.

Cataran, citing SEC’s various legal opinions, declared that when its SEC-issued license is revoked the corporation is already considered dissolved, or ceases to exist.

Senator-judges, including Senate President Juan Ponce Enrile, disagreed, saying that the SEC could not immediately kill a corporation.

“Only shareholders can dissolve a corporation,” Enrile said.

But Umali and Cataran did not share Enrile’s views, citing various orders issued by the SEC. The SEC has ruled that the revocation of a corporation “is immediately effective” and that a corporation is given 3 years after that as a period of “liquidation.”

This sparked a legal debate on the floor.

Sen. Loren Legarda asked the prosecution what exactly were they driving at by presenting the witness from SEC.  Umali said they meant to prove that “the alleged cash advance [of Corona from BGEI] is fictitious.”

He added: “Our theory is there couldn’t have been a transaction between Basa-Guidote and Chief Justice Corona because the license of the corporation had already been revoked.”

But other senator-judges could not see the link between the revocation of BGEI’s license to Article 2, or the allegation that Corona failed to disclose his SALN. And they, such as Senators Edgardo Angara and Alan Peter Cayetano, insisted that a license’s revocation does not lead to a corporation’s dissolution.

Sen. Franklin Drilon however stood up to ask Cataran if revocation meant a corporation “can no longer operate except to wind up for 3 years.” To which Cataran said, yes. Drilon again said: “It can’t enter into a new business or perform acts in furtherance of a business except to luquidate.” Cataran said yes.

But other senators said Cataran should not insist that a corporation ceases to exist upon the revocation of its license.

“If you’re not sure of your evidence, do not present it,” a visibly exasperated Sen. Joker Arroyo told the prosecution.

Senate majority floor leader Sen Tito Sotto called for a suspension of the session and announced that the senators will be holding a caucus. Trial resumed at 4.15pm.

Rappler editor at large Marites Dañguilan Vitug said it’s a cue for the prosecution to “make their point early on” in the trial. – Rappler.com








Add a comment

Sort by

There are no comments yet. Add your comment to start the conversation.

Summarize this article with AI
Download the Rappler App!