BAGUIO CITY–The Supreme Court (SC) on Tuesday affirmed its earlier decision which denied the petition of intervention filed by lawyer questioning the implementation by the Securities and Exchange Commission (SEC) of the high court’s ruling in June 2011 imposing the 40-percent limit to foreign ownership of the Philippine Long Distance Telephone Co. (PLDT).
SC spokesman Theodore Te announced the directive was issued during the summer session of the magistrates here.
“The Court voting 8-5, denied petitioner’s motion for reconsideration of the Court’s November 22, 2016 decision (which denied the petition and the petition in intervention) for not having raised any substantially new grounds to warrant a reconsideration,” Te said in a press conference
Te said the Court maintained its 8-5 voting against the petition filed by lawyer Jose Roy III.
Roy’s motion for reconsideration, according to the Court, failed to raise new arguments that would warrant the reversal of its decision issued on December 21.
In its en banc resolution dated Nov. 22, the SC justices voting 8-5, denied the petition filed by Roy against SEC Chair Teresita Herbosa who, the High Court said, did not commit grave abuse of discretion when she issued Memorandum Circular No. 8 Series of 2013 for “lack of merit both on procedural and substantive grounds.” and the petition in intervention filed by Atty. Wilson Gamboa.
The petitioner argued that SEC abused its discretion in issuing MC No. 8 wherein it omitted the uniform and separate application of the 60:40 rule in favor of Filipinos to each and every class of shares of a corporation.
In a decision penned by Associate Justice Alfredo Benjamin Caguioa, the Court en banc upheld the validity of SEC Memorandum Circular No. 8, Series of 2013 or Guidelines on Compliance with the Filipino-Foreign Ownership Requirements Prescribed in the Constitution and/or Existing Laws by Corporations Engaged in Nationalized and Partly Nationalized Activities).
The five justices who dissented with the decision are Senior Associate Justice Antonio Carpio, Associate Justices Teresita Leonardo De Castro, Arturo Brion, Jose Mendoza and Marvic Leonen.
In the Gamboa decision, the Court held that the “capital” requirement in Article XII, Section 11 of the 1987 Constitution refers only to shares of stock entitled to vote in the election of directors.
The Court directed SEC to apply this definition of the term “capital” in determining the extent of allowable foreign ownership in the case of PLDT and if there is a violation of Section 11, Article XII of the Constitution, to impose the appropriate sanctions under the law.
Roy questioned the constitutionality of the memorandum for not conforming to the spirit and letter of the Court’s decision in the case of Gamboa v. Teves promulgated on June 28, 2011 and its Resolution on the motions for reconsideration issued on October 9, 2012 on the limit to foreign ownership under Section 11, Article XII of the Constitution.
The high court, in a ruling, said there was no grave abuse of discretion on the part of the SEC when it issued MC No. 8.
Under MC No. 8, specifically Section provides that “all covered corporations shall, at all times, observe the constitutional or statutory ownership requirement. For purposes of determining compliance therewith, the required percentage of Filipino ownership shall be applied to both the total number of outstanding shares of stock entitled to vote in the election of directors and the total number of outstanding shares of stock, whether or not entitled to vote in the election of directors
“The Court found that the SEC did not gravely abuse its discretion as it was simply implementing the Gamboa Decision and the Gamboa Resolution (2011 and 2012 ruling). The Court reviewed the Gamboa Decision and Resolution and reiterated that both defined “capital” broadly but only to apply to shares of stock that can vote in the election of directors and that MC No. 8 simply implemented and is, thus, fully in accordance with Gamboa,” the high court said.
In the same ruling, the high court, however dismissed the second issue on Roy’s petition on whether the SEC gravely abused its discretion in ruling that PLDT is compliant with the constitutional cap on foreign ownership.
“The court found that the SEC had yet to make a definitive ruling on PLDT’s compliance with the capital requirement pursuant to the Gamboa decision and the Gamboa resolution, thus any ruling would be premature.”
“Also, the Court cited that the determination of PLDT’s compliance with the capital requirement is a question of fact best left to the SEC as the court’s is not a trier of facts,” the high court added.