WHY should a stock corporation already registered with the Securities and Exchange Commission (SEC) seek a legal opinion on the legality of its ownership profile, if this is in compliance with the required 60-40 percent ownership ratio in favor of Filipinos? In the first place, the SEC would not have approved its registration if foreign ownership in it exceeds the legally allowable 40-percent limit for companies engaged in partially-nationalized industries.
One need not be a lawyer to understand that a certificate of registration issued by the SEC grants an applicant stock corporation legal personality. Why question the SEC’s own approving power? The SEC is the only government agency tasked to approve or disapprove the registration of private companies, such as stock and non-stock corporations and partnerships.
Besides, it takes time for SEC lawyers to study a legal issue. For instance, lawyers Saben Loyola and Joseph Rebano of Del Rosario & Del Rosario Law Offices, sought the SEC’s opinion on the legality of the ownership of its client thru a letter dated February 22, 2012. How urgent was the lawyers’ query on the legality of its ownership composition? It was probably very urgent because Anscor Swire Ship Management Corp. wanted an assurance that it was not violating the 75-25 percent ownership profile for manning agencies in favor of Filipinos.
If Anscor was in a hurry to know the answer, its owners were in for a big disappointment, because the SECs response came too late to give them immediate peace of mind. As posted on www.sec.gov.ph, Camilo S. Correa, SEC general counsel, signed the commission’s legal opinion on November 27, 2013. It took the SEC, which has five commissioners including the chairman, 21 months and five days to study the legal poser. I hope my arithmetic is correct.
Now here is the issue: Anscor’s stockholders are Serrata Investment Inc., with 14,994 shares or 74.97 percent; and Swire Pacific Ship Management Corp., with 4,998 shares. Including three Filipinos stockholders and one British, Anscor ends up 75-percent owned by Filipinos and 25-percent owned by foreigners.
Simple question needs only a simple answer. But Correa took so many words to respond to it, because he had to cite the governing laws and rules and previous opinions. Isn’t 75 percent more than 60 percent, which is the minimum Filipino ownership required in a venture that should be controlled by Filipinos? But in the case of manning agencies, the law requires Filipino ownership of at least 75 percent.
Why did Anscor’s stockholders doubt the legality of their company?
You could safely presume that Anscor did a computation of its own before and came out with a “suspicious” number. As incorporated with the SEC, Serrata is 60 percent Filipino and 40 percent foreign. As provided for in the law, a 60-40 corporation in favor of Filipinos is considered 100 percent Filipino. Yes, for purposes of determining the nationality of a company engaged in ventures that should be controlled by Filipinos, said computation is applied.
But try to compute the holdings of foreigners in Serrata, then add the results to 5,000 shares owned by the British group, and you would come out with this: 40 percent of 14,994 equals 5,997.6 plus 5,000 shares held by the British equals 10,997.6 divided by 20,000 shares equals 54.988 percent.
The resulting percentage of foreign ownership was probably what forced Anscor’s stockholders to go to the SEC for a legal opinion. Luckily for them, the rule went in their favor.
: “. . . Since Serrata is 60-percent owned by Filipinos,” the SEC said, “its shareholders of 74.97 percent is considered owned by Filipinos for purposes of computing the required 75 percent equity for manning agencies.” Then the SEC suggested that by adding the “0.030 percent shareholdings of Filipino individuals, then the company is 75-percent Filipino owned in compliance with the law.”