Friday, July 11, 2008 GSIS, Meralco lawyers present stands on leadership row
LAWYERS for both the Government Service Insurance System (GSIS) and the Manila Electric Company (Meralco) have submitted their respective memoranda before the Court of Appeals (CA) stating their positions on whether the leadership row may be threshed out before the Securities and Exchange Commission (SEC).
The CA Special Ninth Division is hearing the petition filed by Meralco executives seeking to stop the SEC from implementing a cease and desist order (CDO) stopping the counting of proxy votes in favor of the Lopezes.
The CDO was issued by the SEC based on the complaint filed by the GSIS questioning the validity of the disputed proxies as these were allegedly solicited in violation of the categorical provisions of the Securities Regulations Code (SRC).
During the hearing on June 23, the CA directed the parties to focus on three issues: whether or not the proxy forms that was used by Meralco did not comply with the SEC rules and regulations; whether the issue is an intra-corporate one, therefore, should be lodged before the lower court; and whether SEC committed grave abuse of discretion in issuing the CDO, granting that it had authority to issue such.
In its petition, the GSIS through its lawyer Estrella Elamparo-Tayag said the SEC retained jurisdiction over the controversy because the nature of the relief it sought, which was for violation of the SRC.
"It is useless for the petitioners therefore to keep on harping on the transfer of jurisdiction over intra-corporate disputes to the regular courts because the subject case is not one such dispute. This case is all about violations of the SRC," Tayag said.
Among the violations allegedly committed by Meralco, according to Tayag, were that: the Information statement did not contain any proxy form; the proxy forms used did not indicate on whose behalf the solicitation is made; the forms did not provide a specifically designated blank space for dating the proxy card; and that, the means were not provided in the forms whereby the person solicited is afforded an opportunity to specify by boxes a choice between approval or disapproval of, or abstention with respect to, each matter to be acted upon, other than election to office.
Tayag said these blatantly violated Rule 20 of the SRC on "solicitation," which was defined as "any request for a proxy or authorization under a circumstance reasonably calculated to resolve in the procurement, withholding or revocation of a proxy."
Section 53 of the SRC further empowered the SEC to investigate any violation of the Code or any rule or regulation related to it.
For its part, Meralco through lawyer Simeon Marcelo said it was GSIS' "game plan" to illegally grab control of the Lopez-owned power firm with the active participation of the SEC.
Marcelo said the GSIS initially looked to the Pasay Regional Trial Court (RTC) and the SEC when its lawyers very well knew that the proper court to hear their prayer for a temporary restraining order (TRO) is with the Special Commercial RTC in Pasig.
"Simply, this is because respondent GSIS was seeking a secret willing ally in its dark and illegal takeover scheme. Unable to get relief from the Pasay RTC, it brazenly and surreptitiously procured the support of the SEC," he said.
The Meralco group insisted that the special commercial RTCs have jurisdiction over the case being intra-corporate in nature. It noted that the controversy on the validity of the proxies is deemed an election contest as defined under the interim rules of the Supreme Court (SC) on procedures governing intra-corporate disputes.
Marcelo further said that petitioners did not commit any irregularities in the conduct of the validation of proxies, as these were done in full compliance with the law.
The Lopez bloc is composed of Anthony Rosete, acting corporate secretary; Manuel Lopez, chairman of the board and chief executive officer; Felipe Alfonso, vice chairman; Jesus Francisco, president and chief operating officer; Christian Monsod, board member; Elpidio Ibañez, president and chief operating officer of First Philippine Holdings Corp. (FPHC); and Francis Giles Puno, chief officer, treasurer and executive vice president of FPHC. (ECV/Sunnex)
