The Eastern Telecommunications Philippines Inc. (ETPI), whose 20 percent of the outstanding capital stock was sequestered by the government, has asked the Sandiganbayan to dismiss a petition filed by Victor Africa, a stockholder, to allow a stockholders’ meeting and conduct an election of directors.
In an eight-page comment filed before the anti-graft court, Barbara Anne Migallos, ETPI corporate secretary, stressed there is no legal basis for Africa to call for a stockholders’ meeting “even assuming that the court has jurisdiction to act on an-intra-corporate dispute.”
Migallos said the general rule that the authority to call for a stockholders’ meeting rests with the board of directors of a corporation unless the charter of the by-laws of a corporation or the applicable statue provide otherwise.
However, Migallos noted that a special meeting for any purpose may be called by the president or by the secretary or assistant secretary, or at the request in writing of stockholders representing at least 20 percent of the corporations’ issued and outstanding capital stock.
She said the special meeting that may be called could also include an election of directors.
But in the case of Africa, Migallos explained that he is a registered owner of only 2,145 shares of stock ETPI, representing only 0.00825 percent of the outstanding capital stock of ETPI.
Migallos said Africa’s ETPI shareholdings are nowhere near the 20 percent required under the ETPI by-laws to call for a shareholders’ meeting.
She also said Africa cannot invoke Section 50 of the corporation code which allows the SEC to order the calling of a shareholders’ meeting only when there is no person authorized to do so, and on good showing of a good cause.
She said ETPI has an incumbent board of directors and incumbent officers who can call for an election.
“If an order for the calling and conduct of a shareholders’ meeting of ETPI is indeed warranted, such order must be directed to the incumbent board and officers and not to the petitioner (Africa),” said Migallos.
Furthermore, Migallos said Africa’s continuing attacks the incumbent directors and offices amount to a collateral attack on their status.
“Petitioner knows, or ought to know that the appropriate proceedings to question the validity of the election of directors of a corporation is one of quo warranto (demand in court what right one has to a corporation),” she said.