THE Court of Appeals (CA) has advised the National Telecommunications Commission (NTC) to refrain from conducting any proceedings in connection with the bid of Globe Telecom Inc. to take over Bayan Telecommunications Inc.
The CA’s former Special Seventeenth Division issued the plea, after petitioner Philippine Long Distance Telephone Co. (PLDT) manifested before the appellate court that the NTC had resumed proceedings on the matter following the lapse on December 9, 2014, of the 60-day temporary restraining order (TRO) it issued.
The TRO, issued on October 9, 2014, enjoined the NTC from implementing its orders issued on November 27, 2013, December 13, 2013, and July 3, 2014, which allowed the continuation of the proceedings in connection with Globe and Bayantel’s joint application for regulatory approval and denied the petitioner’s motion to dismiss or suspend the same.
“In order to allow this court to scrutinize the numerous pleadings on the matter, all respondents are well advised to exercise spontaneous restraint and show appropriate judicial courtesy so as not to render the issues moot and academic and, thus, afford this court reasonable opportunity to resolve the pending incident/s,” the CA said.
The CA said that, due to numerous and voluminous pleadings filed and the fact that the NTC has yet to file its main comment on the petition filed by PLDT, the application for preliminary injunction by the latter has yet to be resolved.
“Hence, by this incident, it can be inferred that while the TRO was in effect, respondent [NTC] had hastily set a hearing to be conducted immediately after the lapse of the 60-day effectivity,” the CA said.
The CA granted the motion or extension to file comment of the NTC and the motion by PLDT for additional time to file reply to the comment of the respondents.
In issuing the TRO, the CA noted that petitioner PLDT, which is chaired by businessman Manuel V. Pangilinan, being a stakeholder in the telecommunications industry, “has a clear right to be protected on account of the State’s policy to protect all telecommunication companies from unfair competition and to due process.”
Aside from PLDT, other stakeholders in the telecom industry, such as Smart Communications Inc., Digitel Mobile Philippines Inc. and Next Mobile, have also expressed their opposition to the takeover.
Bayantel is currently under corporate rehabilitation under guidance of the Regional Trial Court in Pasig City Branch 158.
The case stemmed after the rehabilitation court’s approving Bayantel’s amended rehabilitation plan and master restructuring agreement, which allowed its creditors the option to convert their restructured debt in the total amount of $114 million into additional equity.
As the principal creditor, Globe Telecom agreed to convert its exposure into 56.6 percent of Bayantel’s outstanding shares.
However, it is required under Section 20 (h) of Commonwealth Act 146 of the Public Service Act that before a transfer of more than 40 percent of a grantee’s subscribed capital stock can be effected, the grantee and the transferee must obtain the approval or authorization of the NTC. Otherwise, the transfer shall be deemed null and void.
Globe acquired 98.26 percent of Bayantel’s loans and 100 percent of Radio Communications of the Philippines Inc.’s (RCPI) liabilities. RCPI is a unit of Bayantel, both of which are owned by the Lopez Group.
The acquisition cost $130 million, lower than the $400-million face value of Bayan’s aggregate debt.