SEC cancels registration of 3-D distributor

The Securities and Exchange Commission (SEC) has cancelled the certificate of registration of Northern Islands Co., Inc. (NICI) whose corporate life expired on Aug. 6, 2007.

NICI is the sole distributor of 3-D home appliances in the country. It was registered on Aug. 6, 1957 for a corporate term of 50 years.

The SEC had earlier approved an extension of NICI’s corporate life based on a set of amended articles of incorporation submitted by the company on Feb. 19, 2008. The approval was made on March 17, 2008, with the SEC’s company registration and monitoring department (CRMD) issuing a certificate extending the term of the company by another 50 years.

However, on Aug. 15, 2008, 3-D Industries, Inc. filed with the SEC a petition for the revocation, cancellation and/or annulment of NICI’s amended articles of incorporation. 3-D contended that a corporation whose corporate life has expired can no longer be extended. The petitioner alleged that there were irregularities committed by NICI in complying with the requirements for amendment. The petitioner alleged that it had not received notice of stockholders’ meeting from NICI and that no stockholders‘ meeting was held for the purpose of amending the articles of incorporation. Petitioner also pointed out that the venue for the stockholders’ meeting as claimed by NICI was outside the corporation’s principal office and that Dante V. Gil, the lawyer who notarized the document, is not a duly commissioned notary public.

The petition was opposed by NICI which asserted that the approval previously issued by the SEC could no longer be revoked for lack of jurisdiction by the SEC and for lack of substantial interest on the part of the petitioner. NICI also accused 3-D of willful forum shopping, citing an earlier petition filed by the latter with the Office of the General Counsel (OGC).

After a careful study, CRMD director Benito A. Cataran issued on Nov. 6, 2008 an order canceling the amended articles of incorporation of NICI.

Cataran debunked NICI’s assertion that the SEC had no jurisdiction over the case. He also did not agree with the company that the petitioner was forum shopping as he noted that the petition filed with the OGC had a different prayer from the one that was submitted with the SEC.

He brushed aside the argument of NICI that the petitioner lacked substantial interest. Cataran pointed out that what is stake is not merely the interest of the petitioner but of the public in general.