CA restrains SEC on Philcomsat case

The Court of Appeals (CA) has issued a 60-day temporary restraining order (TRO) preventing the Securities and Exchange Commission (SEC) from requiring Philcomsat Holdings Corp. (PHC) to create a nominations and elections committee (nomelec) and call an annual stockholders’ meeting.

The order was in response to the motion filed by the Nieto Group, which holds shares in PHC.

"In order not to render the decision of this court moot and academic, there being a prima facie doubt as to SEC jurisdiction over issues involving intra-corporate controversies which are now within the original exclusive jurisdiction of the regular courts, a temporary restraining order is hereby issued for a period of 60 days from service of notice…," the CA said.

The CA has given the SEC 10 days from receipt of notice to file its comment while the petitioner was given five days from receipt of respondents’ comments to file a reply.

Shareholders of the Philcomsat Group of Companies continue to squabble over management and assets of the concerned corporations despite a memorandum of understanding forged last month.

Recently, the Nieto group called for an independent audit of the books and records of Philcomsat (Philippine Communication Satellite Corp.) and Philippine Overseas Telecommunications Corp., saying that the only way to resolve the divisiveness among shareholders of the Philcomsat Group is to subject Philcomsat and POTC to an independent audit to find out which group is telling the truth.

The Presidential Commission on Good Government said the proper tribunal to supervise the annual elections for the three companies is the Sandiganbayan.

The PCGG, the government agency tasked to recover ill-gotten wealth during the Marcos era, owns 35 percent of POTC, which owns 100 percent of Philcomsat. It also owns 30 percent of PHC.

The PCGG earlier asked the SEC to hold in abeyance the stockholders’ meeting of PHC pending due election of a common board of directors in POTC and Philcomsat as called and supervised by the Sandiganbayan.

The SEC earlier said it would not interfere in the affairs of PHC with the signing of an MOU by shareholders of the Philcomsat Group.

Under the agreement forged between the Africa group and Nieto camp, a unified slate for the board of directors of PHC has been formed, comprising the private stockholder-families of the Philcomsat Group of Companies.

The parties agreed that each of the six shareholder-families shall appoint a representative who the parties shall cause to be elected as director of Philcomsat and PHC while five of such representatives shall be elected as directors of POTC, the sixth to be elected immediately after the number of POTC directors as stated in the Articles of Incorporation has been increased to nine.

The parties also agreed that Amb. Manuel H. Nieto Jr., as one of the two remaining living incorporators of POTC will assume the position of chairman emeritus of POTC, Philcomsat and PHC.