Goco raps SEC for ‘baseless’ suit against CAP directors

Former Solicitor General Raul Goco, an independent director of College Assurance Plans Phils. (CAP), has assailed the Securities and Exchange Commission (SEC) for filing a "baseless" criminal suit against the pre-need firm’s directors for unauthorized sale of educational plans.

Goco said the SEC should have carefully studied the charges it leveled against CAP as these allegations have damaged the reputation of CAP’s directors given the extensive media coverage on the issue.

He said CAP, since its founding, has had outstanding personalities in its board among them a former Philippine President, senators, ambassadors, Cabinet members, and distinguished lay persons. The incumbent chairman of the board was a former Secretary of Education and now a National Artist.

Goco said these CAP directors now have the right and a valid cause to sue the SEC for the malicious criminal case to redress and vindicate their names.

Goco said there was no board action authorizing such sale and there was even the presence of the SEC’s Oversight Board during CAP’s board meetings who could have known and reported this. He also said that under the Corporation Code, directors to be held liable must willingly and knowingly vote or assent to a patently unlawful act and are guilty of gross negligence or bad faith.

Goco also pushed for the immediate passage of the Pre-need Code to "to rehabilitate, reform and regulate the pre-need educational programs that worked so well in the past as a major vehicle for youth educational entitlement".

Moreover, Goco said the present predicament of CAP could be attributed to the imposition of certain regulations in 2002 which were implemented without providing CAP and other pre-need companies enough opportunity to be heard or to air their side.

Goco said that while rules are needed for organizations dealing with the public, these rules should be crafted to channel the best ideas rather than hinder creativity.

Meanwhile, the SEC has filed its opposition to CAP’s petition for rehabilitation on the ground that the proposed recovery plan is not viable due to unrealistic assumptions. "The projections prepared by CAP have so many presumptions and on the basis of CAP’s zero batting average in fulfilling its promises, the rehabilitation plan is not feasible," the SEC said.

"CAP’s projections presume that a new stockholder or stockholders will infuse fresh capital into the company. If the past years will be the basis for assessing its ability to find and successfully convince new risk-takers to put their money into CAP, there is a strong possibility that this would not happen," the SEC added.

The SEC said the sale of CAP’s equities in its subsidiaries and affiliates will not be that profitable for the company. Based on its unaudited financial statements as of end-June this year, the book value of CAP’s investments in its related parties amount only to P257.26 million.