CA allows P412-M suit vs Ongpin to proceed

MANILA, Philippines - The Court of Appeals (CA) has junked the bid of businessman and former trade minister Roberto Ongpin for the dismissal of a P412-million derivative suit emanating from the buying and selling of shares of Philex Mining Corp. by his firms in 2009.

In a 13-page decision, the third division of the appellate court dismissed Ongpin’s petition seeking to nullify an order of the Pasig regional trial court on April 3, 2012 that junked his motion for immediate dismissal of the complaint filed by Philex minority stockholder lawyer Mario Ongkiko seeking to collect from Ongpin “short swing profits” from the trading of shares.

The CA dismissed Ongpin’s allegation that the RTC abused its discretion in denying his motion to expunge the case on the ground that Ongkiko failed to correct the filing fees in the complaint filed through his daughter and attorney-in-fact Zenaida Ongkiko-Acorda.

It held that the RTC was correct in ruling that Ongpin’s motion to expunge should be denied because it is like a motion to dismiss which

is not allowed under the interim rules on intra-corporate controversies.

“Thus, although the petitioners’ motion to expunge complaint is not among the prohibited pleadings listed in the Interim Rules on

Intra-Corporate Controversies, its being uncannily similar in effect to a motion to dismiss, which is absolutely prohibited under the interim rules, makes it the ‘same dog with a different collar,’” read the ruling penned by Associate Justice Apolinario Bruselas Jr.

“No grave abuse of discretion may be attributed to the RTC in disallowing such cleverly titled motion given the factual and legal milieu upon which the resolution was rendered,” it said.

Associate Justices Rebecca de Guia-Salvador and Samuel Gaerlan concurred in this ruling.

Acorda alleged in her derivative suit that Ongpin, through his companies Goldenmedia and Delta Ventures Resources Inc. (DVRI), purchased 50 million Philex shares of stock from the Development Bank of the Philippines (DBP) on Nov. 5, 2009 at P12.75 per share, which they later sold in a block sale to Two Rivers Pacific Holdings Corp. or 452,088,160  Philex shares at a rate of P21 per share on Dec. 2, 2009.

A derivative suit is a lawsuit brought by a shareholder of a corporation on its behalf to enforce or defend a legal right or claim, which the corporation has failed to do.

In the complaint, Ongkiko-Acorda prayed that Ongpin and his companies be declared to have engaged in short-swing transactions and ordered to return to Philex any and all profits realized by them through such transactions including interest.

Ongpin, however, argued that the trial court lacked jurisdiction over the complaint due to the refusal of Ongkiko-Acorda to pay the correct

filing fees, among other reasons.

He added that since the complaint failed to allege the amount of damages demanded that resulted in the computation and payment of an

incorrect filing fee, the trial court had lost jurisdiction over the case.

But the appellate court held that “the non-specification of the amounts of damages does not immediately divest the trial court of its

jurisdiction over the case, provided there is no bad faith or intent to defraud the government on the part of the plaintiff.”