CA allows developer to sell Baguio hotel securities

MANILA, Philippines - The Court of Appeals (CA) has allowed the private developer of Camp John Hay in Baguio City to proceed with the sale of securities for the operation of The Manor Hotel, earlier contested by the Bases Conversion and Development Authority (BCDA).

The Sixth Division of the appellate court granted the petition of Camp John Hay Development Corp. (CJHDevCo) and permanently enjoined the Securities and Exchange Commission (SEC) from implementing its cease and desist order (CDO) against the sale.

The CA also dismissed the complaint filed by the state-run BCDA against the private developer.

The CA said the SEC violated CJHDevCo’s right to due process in issuing the CDO in June last year.

“At the very least, petitioners should have been given the opportunity to explain and answer the allegations propounded to them prior to the issuance of the assailed order,” Associate Justice Hakim Abdulwahid said in the decision.

 Associate Justices Marlene Gonzales-Sison and Edwin Sorongon concurred with the ruling.

 In its complaint, the BCDA claimed that the sale of the units of The Manor and The Suites with leaseback or money back arrangements should be regarded as investment contract or sale of securities, which requires prior registration with the SEC.

The CA said the SEC erred in its findings noting that the sale of the units with leaseback or money-back arrangement does not include investment of money.