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THE
Securities and Exchange Commission (SEC) has asked the
Court of Appeals (CA) to lift the restraining order it
imposed against it on May 30, a move that stopped the
corporate regulator from investigating the alleged
defiance by the Lopez group of an order on the use of
proxy shares.
In a
14-page response filed Tuesday with the Special Ninth
Division of the appellate court, the SEC maintained that
the cease-and-desist order (CDO) versus Manila Electric
Co. (Meralco) chairman Manuel Lopez and allies Jesus
Francisco, Felipe Alfonso, Christian Monsod, Anthony
Rosete, Elpidio Ibañez and Francis Giles Puno was issued
in the valid exercise of its regulatory jurisdiction
under the Securities Regulation Code (SRC).
“The
assailed CDO is valid and regular on its face,” the SEC
said in the petition.
The
corporate regulator also defended one of its
commissioners, Jesus Martinez, saying the order was not
done in haste and the issuance was conferred with
Commissioners Raul Palabrica and Thaddeus Venturanza.
SEC Chairman Fe Barin and Commissioner Juanita Cueto
were not present when the CDO was issued.
“Commissioner Martinez duly coordinated and discussed
the propriety of the issuance of assailed order with two
other SEC commissioners before he issued the same in
behalf of the commission. The claim of bias against
Martinez is baseless,” the SEC added.
The SEC
reiterated that it issued the disputed CDO “in the valid
exercise of its regulatory jurisdiction under the SRC.”
It asked
the CA that the TRO “be immediately lifted and that the
petition be dismissed for lack of merit.”
In the
CA ruling dated May 30 and penned by associate justices
Vicente Roxas, Jose Sabio Jr. and Myrna Vidal, issued
the TRO for a period of 60 days restraining, enjoining
and prohibiting respondents from proceeding on and
causing the implementation of the undated SEC CDO (which
is alleged to have been rendered moot and academic due
to lack of jurisdiction by the SEC and the SEC’s show
cause-order dated May 27).
Meralco
executives said the CDO order was null and void
primarily because the SEC has no jurisdiction over
intracorporate matters.
The
corporate regulator acted on the verified complaint
filed by Government Service Insurance System (GSIS)
president and general manager Winston Garcia.
The GSIS
claimed the “manufactured proxies” represent more than
30 percent of the outstanding shares of stock of Meralco
and are shares owned by brokers, banks, investment
managers, Meralco pension fund and Union Fenosa.
“Respondents Lopez, Alfonso, Francisco, Monsod, Ibañez
and Puno, being among those named in the proxies sought
to be invalidated, are also impleaded to restrain them
from voting the challenged shares solicited by Meralco
management in violation of the [SRC],” the CDO said.
Garcia,
in his complaint, claimed there was massive solicitation
of proxies by the Meralco management, and Meralco
corporate secretary Anthony Rosete is poised to validate
and honor these proxies despite the lack of compliance
with the legal requirements for solicitation of the
proxies.
The CDO,
however, did not stop Meralco from voting the
questionable shares after its board and legal counsel
deemed the SEC order as null and void on several
grounds, including the absence of due process, claiming
the order was predetermined and without proper
investigation.
A
whopping 86.8 percent of the total number of
stockholders was represented in the Meralco annual
meeting through the proxies in question.
Garcia
said the high number of proxies was very dubious,
considering only 70 percent to 75 percent of
shareholders are normally represented in a stock meet.
The GSIS,
which owns one-third of Meralco along with other
government financial institutions, is campaigning for
transparency in the running of Meralco and in the
lowering of its power rates. |
