SEC mulls 3 options to prevent leadership vacuum at PSE

The Securities and Exchange Commission (SEC) is considering three options in case the court restrains eight non-brokers from performing their duties as directors of the Philippine Stock Exchange (PSE).

In a television interview, SEC Chairman Lilia Bautista said once the court rules in favor of the petition filed by former PSE officials led by past president Ramon Garcia, the corporate regulator will have to act swiftly to avert a management vacuum at the exchange.

Garcia, former PSE chair Trinidad Kalaw and former governor Joseph Roxas, filed before the Pasig RTC a petition to nullify the results of the PSE’s March 9 elections which installed the eight non-brokers into the PSE’s 15-man board.

Bautista said should the court issue a cease-and-desist order against the non-brokers, the SEC could "let its own people run the exchange," directly taking over its management and operations.

Another option would be to let the existing PSE officials, led by senior vice president Jose Cervantes, run the exchange although they would have to report directly to the SEC.

When Garcia was booted out as PSE president September last year, the board of directors appointed a six-man management committee led by then PSE chairman Felipe Yap to take over the operations of the exchange while in the process of selecting Garcia‘s replacement.

Garcia was subsequently replaced by former Finance Secretary Ernest Leung who assumed office last January.

Bautista said a third option will be to appoint eight new non-brokers by the SEC itself, taking the job from the PSE‘s nomination and elections committee (Nomelec) which was also cited in Garcia’s petition for its alleged bias. Garcia was among the early contenders for a non-broker post at the PSE but he contended that his candidacy was arbitrarily revoked by the Nomelec.

Garcia had also asked the court to order the exchange to hold another poll wherein this time, the broker-members will cast their votes for the eight non-broker candidates in the board.