MANILA, Philippines—Philippine National Construction Corp. (PNCC) has fended off an attempt by businessman William Gatchalian to take control of the company after the Court of Appeals ruled that the government was correct to reject the latter’s P1.2-billion bid during PNCC’s failed privatization effort for being way below the floor price.
In a ruling written by Associate Justice Vicente Veloso, the appellate court said the bid of Strategic Alliance Development Corp. led by Gatchalian was significantly lower than the floor price of P7 billion set by the Privatization and Management Office during an attempt to sell 76 percent of the outstanding shares of PNCC—owned by the national government and the Government Service Insurance System—in 2000.
“I am extremely pleased that the CA has been convinced of the futility of attempts to acquire government properties through means that are less than honorable,” PNCC president Luis Sison said in a statement sent to the Inquirer. “I have saved these valuable assets once before and this is not new to me.”
Several years ago, Sison was instrumental in thwarting an attempt by private investors to acquire P18 billion worth of PNCC properties by buying long-dormant obligations of the state firm to foreign creditors.
“I will continue to safeguard the properties of PNCC as best I can,” he said.
During the ill-fated privatization effort during the Estrada administration, only two parties submitted bids, with the other group offering only P400 million for control of PNCC. The PMO declared the bidding a failure, for which it was sued by Stradec, claiming that it should have won by virtue of having been the highest bidder with its P1.2-billion submission.
The PMO countered that both bids stood well below its floor price of P7 billion—a number that it had not publicized before the bidding process.
The Makati Regional Trial Court as well as the 14th division of the Court of Appeals (headed by Veloso himself) ruled in favor of Stradec in Jan. 27, 2012.
PNCC appealed the CA decision while the Office of the Government Corporate Counsel went to the Supreme Court for relief.
Two weeks ago, the same CA division reversed its ruling, having found merit in PNCC’s appeal.