MANILA, Philippines — The Securities and Exchange Commission (SEC) has nullified the takeover of The Medical City by a group of shareholders.
In a decision dated Aug. 13, the SEC en banc affirmed the November 2019 resolution issued by a special hearing panel (SPH) penalizing Viva Holdings (Philippines) Pre. Ltd., Viva Healthcare Limited, Fountel Corp. and Felicitas Antoinette Inc. (FAI) “for violating the mandatory tender offer rules and committing fraud in taking over Professional Services Inc. (PSI).”
The SEC modified the resolution to declare null and void with immediate effect all share acquisitions made by Viva Holdings, Viva Healthcare, Fountel and FAI in PSI beginning Aug. 1, 2013. PSI operates The Medical City.
According to the SEC, the acquisition of shares from other shareholders, namely Splash Corp., San Miguel Corp. and Insular Life Assurance Co. Ltd., is also null and void. The shares will revert to PSI as treasury shares, which may be sold to other persons.
PSI shall reimburse Viva Holdings, Fountel and FAI for the subscriptions that were nullified once the shares are sold.
Following the nullification of the shares acquired by the respondents, the SEC directed the Office of the General Counsel to immediately resolve the case relating to the conduct of meeting and the election of the members of the board of directors of PSI.
The SEC also found the respondents liable for the penalty imposed, having acted as beneficial owners of each other’s shares in PSI.
In the resolution issued on Nov. 22, 2019 the SEC panel found Viva Holdings, Viva Healthcare and FAI liable for violating Section 18 of the Securities Regulation Code (src), which requires any person who acquires directly or indirectly the beneficial ownership of more than five percent of equity securities to report the same to the issuer, the exchange where the security is traded and the SEC within 10 days.
The SEC hearing panel ikewise held Fountel, alongside Viva Healthcare, Viva Holdings and FAI, accountable for violating Rules 19.2.A and 19.12 of the Amended Implementing Rules and Regulations (IRR) of the src, which provides that any person who intends to acquire 35 percent or more of a public company’s equity shares shall disclose such intention and contemporaneously make a tender offer.