Iligan City can’t sell assets of NSC, says liquidator

The local government of Iligan City has no legal right to auction off or sell any properties of the National Steel Corp. (NSC) to pay off the steel firm’s real estate obligation to the City of Iligan.

This was clarified yesterday by NSC liquidator Danilo Concepcion who added that "only the NSC liquidator has the legal capacity to sell any assets or properties of NSC."

Concepcion said that he had already asked the Securities and Exchange Commission (SEC) for a stay order against the implementation of the Iligan City Ordinance ordering the collection of the real estate taxes from NSC.

He added that "only after the government has sold the NSC assets or properties can the City of Iligan exercise its preferential right to get its share from the proceeds of the sale."

Concepcion also pointed out that the lien of the City of Iligan only covers the "land, buildings and mills of NSC and does not extend to any other assets of the steel firm."

The City Council of Iligan City last Aug. 3 had passed a City Ordinance instructing the Iligan City Treasurer to impose and collect real estate taxes amounting to almost P929 million on NSC.

According to the City Ordinance, failure by NSC to pay its real estate obligation would force the city government to auction off the properties of NSC.

The Iligan City Council had rejected the request of creditor banks for a condonation of the unpaid real estate taxes of NSC.

The issue of the condonation of the unpaid real estate taxes of NSC by the Iligan City Local Government is delaying the closure of the sale of NSC to the Ispat Group.

The cost of the real estate tax payments has not been included in the selling price and neither the creditor banks nor the Ispat Group wants to shoulder the additional payments.

The refusal of the Iligan City Government to condone NSC’s real estate taxes is deemed to be politically motivated as the new Iligan City Mayor, Lawrence Cruz, belongs to the opposition.

However, the Iligan City Council claims that it cannot condone NSC’s real estate taxes because at least three other firms located in Iligan would also insist on a condonation of their outstanding real estate taxes.

The Iligan City Government estimates that if it condones the real estate taxes of NSC and is also forced to write off the obligations of the three other firms, the City would forego real estate tax revenues of a little over P1 billion.