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OSG may face raps over Pangilinan firm [The Manila Times, Philippines]
(Manila Times (Phillipines) Via Acquire Media NewsEdge) Feb. 16--THE Office of the Solicitor General (OSG) could be held for contempt by the Supreme Court for non-compliance of its order to answer a plea in connection with the foreign capital ownership in publicly listed telecommunications firm Philippine Long Distance Telephone Co. (PLDT) owned by business tycoon Manny Pangilinan.
This was after the High Tribunal issued a show cause order against the government lawyers from the OSG due to its failure to comment on the petition filed by PLDT stockholder Wilson Gamboa against Finance Secretary Margarito Teves and several others.
"The court resolved to require the OSG to (a) show cause why it should not be disciplinarily dealt with or held in contempt for failure to file the required comment with the extension allowed..." the ruling said.
In a full court ruling, signed by Clerk of Court Enriqueta Vidal, the Court also ordered the OSG to "indentify the lawyer/ lawyers in charge of this case, both within ten (10) days from notice hereof."
The tribunal also noted the consolidated reply dated November 24, 2011 filed by counsel for respondent PLDT chair Manuel Pangilinan.
The Court gave OSG an extension of time to file its comment or appellee's brief but failed to do so.
The Court directed the Securities and Exchange Commission (SEC) to apply the definition of "capital" in its ruling in the case filed by Gamboa.
According to its June 28, 2011 decision, the High Court said that the SEC had neglected its duty to see to it that the term "capital" be implemented for PLDT.
The Court also ruled that "the term capita in Section 11, Article XII of the 1987 Constitution refers only to shares of stock entitled to vote in the election of directors, and thus in the present case only to common shares, and not to the total outstanding capital stock (common and non-voting preferred shares). Respondent Chairperson of the Securities and Exchange Commission is directed to apply this definition of the term "capital" in determining the extent of allowable foreign ownership in respondent Philippine Long Distance Telephone Company, and if there is a violation of Section 11, Article XII of the Constitution, to impose the appropriate sanctions under the law."
On 28 November 1928, the Philippine Legislature enacted Act No. 3436 which granted PLDT a franchise and the right to engage in telecommunications business.
In 1969, General Telephone and Electronics Corporation (GTE), an American company and a major PLDT stockholder, sold 26 percent of the outstanding common shares of PLDT to PTIC. In 1977, Prime Holdings, Inc. (PHI) was incorporated by several persons, including Roland Gapud and Jose Campos, Jr.
Subsequently, PHI became the owner of 111,415 shares of stock of PTIC by virtue of three Deeds of Assignment executed by PTIC stockholders Ramon Cojuangco and Luis Tirso Rivilla.
In 1986, the 111,415 shares of stock of PTIC held by PHI were sequestered by the Presidential Commission on Good Government (PCGG).
The 111,415 PTIC shares, which represent about 46.125 percent of the outstanding capital stock of PTIC, were later declared by this Court to be owned by the Republic of the Philippines.
In 1999, First Pacific, a Bermuda-registered, Hong Kong-based investment firm, acquired the remaining 54 percent of the outstanding capital stock of PTIC.
On 20 November 2006, the Inter-Agency Privatization Council (IPC) of the Philippine Government announced that it would sell the 111,415 PTIC shares, or 46.125 percent of the outstanding capital stock of PTIC, through a public bidding to be conducted on 4 December 2006.
Subsequently, the public bidding was reset to 8 December 2006, and only two bidders, Parallax Venture Fund XXVII (Parallax) and Pan-Asia Presidio Capital, submitted their bids. Parallax won with a bid of P25.6 billion or US$510 million.
First Pacific announced that it would exercise its right of first refusal as a PTIC stockholder and buy the 111,415 PTIC shares by matching the bid price of Parallax.
However, First Pacific failed to do so by the 1 February 2007 deadline set by IPC and instead, yielded its right to PTIC itself which was then given by IPC until 2 March 2007 to buy the PTIC shares. On 14 February 2007, First Pacific, through its subsidiary, MPAH, entered into a Conditional Sale and Purchase Agreement of the 111,415 PTIC shares, or 46.125 percent of the outstanding capital stock of PTIC, with the Philippine Government for the price of P25,217,556,000 or $510,580,189.
The sale was completed on 28 February 2007.
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(c)2012 The Manila Times (Manila, Philippines)
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