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By Likha Cuevas-Miel, Reporter
The stockholders’ meeting of the Manila
Electric Co. (Meralco) pushed ahead because the Lopez-controlled
management questioned the validity of the cease and desist order
issued by the Securities and Exchange Commission (SEC).
The order tried but failed to stop the election
of board members during Meralco’s annual stockholders’ meeting
Tuesday.
Meralco’s Acting Corporate Secretary Anthony
Rosete said the SEC order—signed by Commissioner Jesus Enrique
Martinez—was null and void since it did not have a docket number,
was undated, and did not bear the official seal of the government
regulator.
Management also argued that the only one SEC
commissioner had signed the order.
“Upon verification, we have received
information that the order was issued without the benefit of a
commission meeting, and we are not aware of any complaints filed
with the compliance and enforcement division of the SEC,” Rosete
explained.
Meralco management also questioned the authority
of Martinez to issue the order as his authority is given only on a
“day-to-day basis” in the absence of SEC Chairman Fe Barin, who
is out of the country. Another SEC commissioner, Juanita Cueto, was
reportedly in hospital, while Commissioner Raul Palabrica is out of
town.
Issuing the order was without due process and
Martinez “on his own, predetermined the validity of the GSIS
[Government Service and Insurance System] proxies without proper
investigation,” the acting corporate secretary said.
None of the Meralco directors was informed of
this complaint by the state fund, Rosete told the shareholders.
The jurisdiction of the SEC was also questioned,
since based on Securities and Regulation Code, intra-corporate
disputes were already transferred to the regular courts.
Rosete insisted that GSIS was guilty of forum
shopping for filing the same complaint, referring to case filed
before Branch 118 of the Pasay Regional Trial Court.
Order valid
But lawyer Gerard Lukban, SEC commission
secretary, told The Manila Times that the order was drafted in
consultation with Commissioners Palabrica and Thaddeus Venturanza
and the regulators’ general counsel.
The complaint and the issuance of the cease and
desist order “was urgent,” since it was a provisional remedy
meant to prevent damage, and it has not yet been properly sealed and
docketed “due to the urgency of the matter.”
Lukban added that there is “a fine line”
that separates the jurisdiction of the SEC and the courts regarding
intra-corporate disputes, and the regulator is still authorized to
step in when it comes to administrative matters. Disregarding the
order is a “violation of a valid Commission order subject to the
penal provisions of the SRC.”
Going to court
A lawyer, external counsel and director of some
publicly listed corporations told The Times that Meralco’s
disregard of the SEC order is a strategy of the company to
strengthen their case against GSIS President Winston Garcia and the
validity of the order.
“If they did not push on with the meeting and
the voting, it would weaken their argument,” the source said.
What the company should do is to go to the SEC
and question Martinez’s authority to issue the order and ask
whether all the commissioners’ consent were asked on the matter.
Martinez may call the SEC chairman, wherever she
may be, and other commissioners and consult them on important issues
like these, said the lawyer who is also privy to SEC legal matters.
If Martinez consulted the other commissioners,
then he is authorized to sign and issue the cease and desist, the
lawyer said.
The source also said the docket number and SEC
seal is “for formalities” and administrative complaints do not
have to be docketed as it is already enough that the complaint was
addressed to the SEC, and the regulator acted on it.
As for questions of SEC jurisdiction in the
Meralco meeting, the source said that it is only the quasi-judicial
powers of the regulator that were transferred to the courts, not the
administrative powers of the commission. In this regard, the SEC is
not out of bounds, as claimed by Meralco.
Whether the proxies were “illegal,” as
Garcia claimed they were, will be decided by the SEC on Friday,
Guevara said.
The Times’ source said it is only then that it
can be decided whether the votes cast during the stockholders
meeting are valid.
What the GSIS can do is file a case with the
courts against the actions of Meralco management for disregarding
the SEC order and to nullify the proceedings of the meeting.
“Anyway, it is easy to file the case the next day,” the lawyer
said.
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