SEC, bourse set guidelines on new foreign equity ruling
The Securities and Exchange Commission is working with the Philippine Stock Exchange to draft a workable remedy for corporations with foreign ownership covered by the final Supreme Court ruling on the capital of Philippine Long Distance Telephone Co.
The SEC and the PSE met Friday with some stakeholders to discuss prospective remedy, a commissioner of the corporate watchdog said.
“We have to set guidelines for compliance with the Carpio ruling and we are giving this the highest priority,” SEC Commissioner Juanito Cueto said. “(We) have some solutions in mind but still have to address some legal loose ends. Rest assured we will provide working solutions within our legal framework.”
She said SEC Chair Teresita Herbosa would be back from a Paris trip by Monday so further discussions on the prospective solutions would happen next week.
This developed as some stock analysts who have read the ruling on foreign equity cap in PLDT said it was uncertain whether the issuance of voting preferred shares—as already done by PLDT and other large-cap corporations like Ayala Land Inc.—would suffice as remedy.
Manny Cruz, chief strategist at AsiaSec Equities, said such uncertainties were an overhang to large cap stocks.
The SC ruling on PLDT penned by Justice Antonio Carpio has a far-reaching impact on the rest of corporate Philippines as it meant that non-voting shares do not count as equity when computing for a company’s Filipino ownership level—for purpose of compliance with the 40-percent foreign equity limit on key industries like property and utilities.
But the high court has also given PLDT and affected companies the chance to comply with the directive. “Under prevailing jurisprudence, public utilities that fail to comply with the nationality requirement under Section 11 Article XII and the Foreign Investments Act can cure their deficiencies prior to the start of the administrative case or investigation,” the SC said.
Speaking for the family of the late petitioner Wilson Gamboa, his son and namesake Wilson Gamboa Jr. said before his father’s death on Oct. 13, 2011, that he had filed a manifestation before the high court requiring the SEC to observe the decision.
“Now that the Supreme Court has spoken with finality, it’s time for the SEC to enforce the decision. The Supreme Court should give due course to the earlier manifestation of my father,” Gamboa Jr. said in a statement. “This only goes to show that he is vindicated on his stand on the issue of economic nationalism.”
