At the same time, the SEC has declared the chairman, president and the board of directors of BCCC in indirect comtempt for failing to comply with an earlier directive of the Commission. As a result, a P10,000 fine was imposed by the SEC for BCCC‚s failure to amend its by-laws and elect new members of the board.
As early as November 2002, the SEC had already ordered BCCC to amend the term of office of its board of directors from two years to one year and to elect a new board.
In an order issued recently, the SEC cited Section 23 of the Corporation Code which provides that the term of the board of directors of a stock corporation is limited to only one year.
While it held an annual stockholders meeting last year, BCCC had failed to elect a new board of directors. Under BCCC’s by-laws, the term of office of its board members is two years.
SEC General Counsel Vernette G. Umali-Paco, however, said: "If the corporation or its by-laws deviate from the set yardstick of the law, the SEC, in its exercise of regulatory, supervisory and control over corporations and partnerships registered with it may perfectly compel a corporation to perform an act or inhibit it to do an act or enjoin it in order to tow the legal line."
This, she said, was an extraordinary case of regulation and supervision of juridical entities because the subject matter does not involve per se an intra-corporate issue.
"The fact that there are overstaying directors in BCCC due to the inadvertent approval of the corporation’s by-laws allowing a term in excess of one year for board of directors is reason enough to effect an immediate legal correction," Paco said.
Moreover, Paco said the calling of the annual meeting is mandatory under Section 50 of the Corporation Code, which states that "regular meetings of stockholders or members shall be held annually on a date fixed in the by-laws."
"Whenever, there is no person authorized to call a meeting, the SEC, upon petition of a stockholder or member and on the showing of good cause therefore, may isue an order petitioning stockholder to call a meeting of the corporation by giving proper notice," the Code further said.
Paco has designated Director Benito Cataran and Atty. Rosalina Tividad-Tesorio of the SEC’s Company Registration and Monitoring Department and Director Justina Callangan of the Corporation Finance Department to supervise the scheduled meeting.
She said the annual meeting must be held preferably at the principal office, if feasible. Otherwise if the exigency demands, the meeting shall be conducted in an alternate venue to be determined by the SEC or its duly designated representatives within Baguio City.
To ensure a peaceful and orderly conduct of elections, the SEC may enlist the aid of the military and the city government in the implementation of its powers, Paco said. The SEC has also ordered BCCC to furnish the SEC within 10 days from receipt of the order to submit the list of stockholders and their respective addresses from 1996 to present.
The order was in response to a request of a lawyer for SEC to call motu propio and conduct under its control and supervision, the elections of the board of directors of BCCC and to set specific election guidelines.
The current BCCC board argued that the SEC has no jurisdiction over the case considering that the with the promulgation of the Securities Regulation Code, jurisdiction over all intra-corporate cases including the authority to hear and decide controversies in the election or appointment of directors, was transferred to the Regional Trial Courts.
BCCC said that while the src retained the SEC‚s power to compel officers of any registered corporation to call meetings, the Commission can not by itself call and conduct a stockholders meeting.
The death of Potenciano Ilusorio, the club‚s late board chairman has left unresolved a family dispute that had pitted his widow, Erlinda Kalaw-Ilusorio, oldest son Ramon, and daughters Marietta and Shereen against eldest daughter Sylvia Ilusorio-Yap, Maximo, and Ma. Erlinda Ilusorio-Bildner.
Several lawsuits have been filed by Erlinda against her three children for allegedly depriving her of her conjugal property rights, shares of stocks in several corporations, and most of all, her desire to be with her husband until his untimely death.
According to Erlinda, her husband was forcibly taken away from their residence in Antipolo some three years ago by her three children after he was diagnosed in the United States to be suffering from Alzheimer‚s disease, a progressive deterioration in mental ability due to degeneration of brain tissue and which is marked by severe impairment of short-term memory.