CA stops SEC from removing ASB receiver

The Court of Appeals has issued an injunction order preventing the Securities and Exchange Commission (SEC) from removing Fortunato Cruz as rehabilitation receiver for the debt-strapped ASB Group of Companies.

SEC Chairman Lilia R. Bautista, however, said the SEC will seek a reconsideration of the decision for the protection of ASB owners and creditors.

Earlier this year, the SEC decided to terminate the services of Cruz for refusing to acknowledge a new SEC policy pegging the fee of a rehabilitation receiver to P50,000 a month. Cruz, who was hired as receiver on April 26, 2001, was getting P375,000 a month.

In contesting the SEC policy, Cruz said he had an existing contract with the ASB Group. Sources said he was asking for P1 million to P3 million more from ASB management.

The SEC and ASB management found Cruz’s fee too high, considering that the company was in financial distress and could use the money reducing of its debts.

As a rehabilitation receiver, Cruz’s job was to protect the assets of ASB and ensure the continued survival of the cash-strapped firm.

The SEC had questioned the disbursement of P15.89 million by ASB to its rehabilitation receiver and accountants. Citing Section 4-25 of the Procedure s on Corporate Recovery, the SEC said the release of funds was illegal because it was done before prior approval by the Commission. – Zinnia Dela Peña