Nerds of steel
Still standing despite the onslaught of smuggled steel from China, the country’s only surviving integrated flat steel factory, owned by Batangas-based Steel Corp. of the Philippines, or SCP, confronts one more threat to its existence.
About two months ago, out of the blue, the Batangas City RTC ordered SCP’s liquidation. The court in effect ignored several other cases on the company’s rehabilitation, pending in the Court of Appeals and the Supreme Court.
Our contacts in business, particularly those in influential business groups like the PCCI (Philippine Chamber of Commerce and Industry), in which SCP officials are active members, are saying that the court order sounds off the death of the local steel sector.
SCP officials are also crying foul, pointing out that the court order stemmed from a “hostile” takeover bid from one of SCP’s creditors, apparently the large local bank that single-handedly appointed the “receiver” for the company.
Sometime ago, SCP filed a petition for rehabilitation in court which, in turn, brought about other cases filed by the creditors, including foreign banks. After lengthy trial, the Batangas RTC itself approved the rehab plan.
In other words, the company—meaning, the last standing integrated flat steel plant in the country—could still be saved. Then came this sudden turnaround by the court, from rehabilitation to liquidation.
SCP, anyway, still argues that, contrary to the claim of the bank-appointed “receiver,” it is not insolvent. It seems that the court’s liquidation order took a lot of inspiration from the report made by the receiver. SCP officials contended in court that the report was “grossly inaccurate, based on unaudited financial data, speculations and biased opinions.”
For instance, the company noted that the report, for no reason at all, reduced the value of its assets, padded its liabilities and even disregarded the P3.97 billion “revaluation” surplus, based on the valuation of an independent appraisal company.
Also, the receivership report amplified SCP’s liabilities, because it added even unpaid loan interests, although these were still under litigation in the Court of Appeals and the Supreme Court.
The thing is this: Does the law allow the lower courts to rule on cases that still await decisions of the higher courts? Well, to me, it sounded a bit disrespectful of the judicial system.
Anyway, the argument of the steel company could actually become nosebleed legalistic, even a bit nerdy, when it talked of the questionable liquidation order. For instance, it noted that the court cited provisions of R.A. 10142, or the Financial Rehabilitation and Insolvency Act, known among lawyers as FRIA.
Passed only two years ago, FRIA provides for the liquidation of bankrupt companies, as well as rehabilitation for debtors that could get approval from more than 50 percent of their creditors.
That was in 2010, and it so happened that, according to SCP executives, the company filed its rehab petition in court way back in 2006, nothing that previous to the FRIA, the court did not have authority to order the liquidation.
In effect, the liquidation order made the FRIA retroactive, although the very same law said its provisions should not apply to pending rehab cases like SCP. The Supreme Court has yet to release the rules of the FRIA.
In other words, the Batangas RTC seemed too trigger-happy in applying the FRIA to the SCP case. To think, certain noisy creditors of the company actually bought SCP debt paper from the original lenders at huge discounts.
Of course they also would not disclose the price they paid for those notes.
* * *
Surprise—youth organization Anakbayan recently stormed into the press conference of another organization, called “Akbayan,” with Anakbayan calling on the Comelec to disqualify Akbayan in party-list elections in 2013.
What the… and everybody thought those organizations were allies in the so-called progressive movement, both claiming to represent “marginalized” sectors like the urban and rural poor, labor, women and children, and indigenous peoples.
Among the representatives of Akbayan to Congress were Risa Honteveros (who ran for senator under the LP slate of our leader, Benigno Simeon, a.k.a. BS), Walden Bello (UP professor) and Arlene “Kaka” Bag-ao (human rights lawyer).
“Our track record speaks for itself,” according to its recent press statement, listing its work in Congress such as the exposé of the payola scam in 1999 involving the privatization of National Power Corporation, or being the only party-list group that opposed human rights abuses of the military and police.”
Here is a telling portion of the statement: “But beyond our long history of representing the marginalized, our track record shows why the extreme left wants us removed from the party-list race. We represent a constructive and democratic left that is committed to reforms. In numerous issues we have stood on, we succeeded in pushing for reforms while exposing the true nature of the extreme left: an obstructive force committed to nothing but its own selfish agenda.”
Thus, it seems that to Akbayan, its similarity with Anakbayan ends with the almost similar sounds of their names.
Two months ago, the Comelec received a complaint seeking to disqualify the party list of Anakbayan called “Kabataan,” along with the party-list organizations of what Akbayan referred to as “extreme left,” claiming that they were creations of the CPP-NDF-NPA or the Communist Party of the Philippines, National Democratic Front and the New People’s Army.
The complaint said the CPP-NDF-NPA had been trying to use the party-list system to penetrate the legislature, noting that CPP founding chair Jose Ma. Sison said in a speech way back in 1987 that those organizations were working for CPP-NDF-NPA.
The complaint pointed out that the “extreme left” organizations have not denounced the activities of the NPA, with a number of them still calling for “armed revolution.”
Question: How does the Comelec rule on the complaint, even as the body goes about removing “fake” party-list groups?
