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By Sammy Martin, Reporter
THE move of the higher court to stop the
creation of a management committee to run the country’s largest
manufacturer of flat-coated steel of a lower court came just in a
nick of time, senior lawmakers in the House of Representatives said
on Wednesday.
This after Court of Appeals (CA) made a ruling
to stop the lower court from allowing creditors of Steel Corporation
of the Philippines (SCP) to takeover its management.
Rep. Carlos Padilla of Nueva Vizcaya noted that
the ruling “proves beyond doubt that the Court of Appeals will not
tolerate judicial tyranny and abuse of magisterial powers, and it
will always be a bastion of succor for justice and due process of
law to triumph.”
It can be recalled that Batangas Judge
Cecilia Austria favored the creation of a management committee that
will run SCP claiming this to be part of the corporate
rehabilitation of the SCP sought by creditor banks of the steel
firm.
Penned by Associate Justice Apolinario Bruselas
Jr., the CA ruling stated that there was no showing that the rules
of procedure governing intra-corporate controversies were fully
complied with before Judge Austria created the management commitee.
Her act of ordering the creation of a management
committee without due process is indicative of a grave abuse of
discretion and characteristic of arbitrariness, whim and caprice,
the appellate court said.
The CA also warned that “this rule may not be
taken lightly for it is rooted in the Constitutional precept that
‘no man may be deprived of life, liberty or property without due
process of law.”
In a press statement, Padilla said that when he
delivered a privilege speech on the issue he warned that the
“Interim Rules on Corporate Rehabilitation is fatally flawed, in
that its lapses can be used by an unscrupulous magistrate in order
to effect a hostile takeover of a distressed company, instead of
putting it back on its feet.”
Rep. Antonio Cerilles of Zamboanga del Sur, a
former corporate lawyer, backed Padilla’s stand on the issue as he
denounced the move for an unreasonable takeover of steel
corporation.
According to Padilla, the SCP controversy has
made it urgent for Congress to “take a long, hard look at the
pending bills which seek to update and rationalize the corporate
rehabilitation rules.”
He pointed out that the 2001 Rules were
merely stopgap provisions that were never meant to become effective
indefinitely. As shown by the Steel Corporation Case, it has serious
fundamental flaws that need to be addressed at the soonest possible
time if we are to give our industries fertile ground to thrive.”
The SCP, dominating the market for steel roofing
in the country, hit the headlines early this year after its
creditors tried to take over management of the company through a
petition for rehabilitation, which SCP opposed in a heated legal
battle.
Several sectors, including the Federation of
Philippine Industries, SCP’s labor union, business writers and
industry observers denounced the takeover move and lobbied for the
amendment of the rules on rehabilitation.
They were later joined by Padilla who delivered
an emphatic privilege speech on the floor entitled “Conspiracy to
Kill,” wherein he alleged that certain vested interests have
entered into an “unholy alliance” to kill off the country’s
floundering steel industry.
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