JUST when the corporate rehabilitation of Bayan Telecommunications of the Lopez Group of Companies was about to start and effectively assure its 1,128 employees of their security of tenure, a temporary restraining order (TRO) has put the company’s existence in limbo. Not only that, the possibility of having a third player in the telecommunications industry that could ensure healthy competition is similarly put in jeopardy.
On October 9 the Court of Appeals granted the Philippine Long Distance Telephone Co.’s (PLDT) petition for a 60-day TRO on the National Telecommunications Commission’s (NTC) hearing of NTC Case 2013-218, titled “In Re: Joint Application for Regulatory Approval Pursuant to Commonwealth Act 146 of the Court-approved Rehabilitation Plan in SEC [Securities and Exchange Commission] Case 03-25.”
That case is about the Amended Rehabilitation Plan, as approved by Branch 158 of the Regional Trial Court in Pasig City in August 2013, which granted Globe Telecom the right to exercise its option to convert up to 69 percent of Bayantel’s debt into its shares that comprise up to 56.6 percent of the Lopez-owned firm’s capital stock. That debt conversion started the rehabilitation efforts for Bayantel.
Bayantel has already been in the telecommunication-service industry for almost two decades, providing landline and broadband communications to its subscribers. But, because it had defaulted on its financial obligations, Bayantel had to agree to a corporate-rehabilitation program to sustain its viability. In effect, Bayantel was given a fresh lease on its corporate life to continue providing economic value to its customers and employees.
That program, which is anchored on the conversion of its debts of about $400 million, was meant to assure Bayantel that it would continue to serve its landline and broadband subscribers, as well as ensure the continued employment of thousands of its employees, many of whom have been with the company for 17 to 20 years. The program was earlier hailed as precedent-setting judicial activism.
But with the TRO, with PLDT arguing that there is a violation of Republic Act 7925 by assuming that the two companies would be merged, the fate of Bayantel hangs in the balance. PLDT pointed out that Globe and Bayantel are conspiring to create an anticompetitive environment in the telecommunications industry, something that PLDT was familiar with in its not-so-distant past, when it enjoyed a monopoly.
The question, though, is this: Is PLDT’s assertion true? If the rehabilitation program is set against the backdrop of PLDT’s acquisition of Digital Telecommunications (Digitel) in March 2011 to gain the majority of subscribers in the mobile-network industry—a whopping 70 percent of the market—then the difference between them would become very apparent. The PLDT-Digitel merger has shown PLDT’s monopolistic stance by getting rid of a competitor that eats into its profits.
At the time, Digitel had 15 million subscribers, almost all of which were enjoying unlimited services. Even worse, after the PLDT-Digitel merger, a good number of Digitel employees were laid off due to redundancy. This resulted in a huge labor battle that saw Digitel employees picketing in front of the PLDT main office in Makati City. As for the Bayantel rehabilitation program, there is no merger and, in fact, both Bayantel and Globe would continue to lead separate corporate lives.
So why is PLDT so afraid of a rehabilitated Bayantel that it petitioned for a TRO that would stop the NTC hearing? Is PLDT afraid of a third player in the telecom industry? Does it still believe that it continues to enjoy complete control of the industry, where telephone services were so lousy that former Singaporean Prime Minister Lee Kuan Yew had famously mentioned it?
Harassment of businessmen
VICE President Jejomar C. Binay’s lament over the possible persecution of his business allies is a serious charge that the government has to answer, if only to assure that there is no truth to his allegations, for these are deemed serious in the light of his very public intention to run for the highest post in the land.
Binay is now on the hot seat, and those in the business community think that the charges could have stemmed from his early pronouncement to run for the presidency, a charge denied by Malacañang. Whatever, Binay may have his reasons for refusing to attend the Senate hearing on his supposed ownership of a 300-plus-hectare agricultural estate in Rosario town, Batangas province.
Businessman Antonio Tiu, who has his own listed corporation on the Philippine Stock Exchange (PSE), has claimed ownership of the estate, although there are lingering questions about the supposed documentation. The charge that Tiu is a dummy for Binay is something that is yet to unravel in the Senate investigation. The continued persecution of Tiu is what possibly prompted Binay to cry harassment.
There is one thing that a listing on the PSE requires, and that is transparency. The fact that Tiu has been able to have his company’s stocks traded on the PSE speaks volumes about the truthfulness of his financial filings. Unless the PSE sees something wrong about Tiu’s listed firm, the government should take Binay’s harassment charge very seriously.
E-mail: hugagni@yahoo.com.