SEC orders dissolution of Uniwide firms

Securities and Exchange Commission Chairperson Teresita Herbosa. Photo from https://www.sec.gov.ph

The Securities and Exchange Commission en banc has ordered the dissolution and liquidation of assets of the Uniwide group, rejecting its petition to proceed with corporate rehabilitation, saying the once high-flying retailer was beyond rescue.

In an order dated May 30 signed by SEC Chairperson Teresita Herbosa and the other Commissioners, the corporate watchdog called for the dissolution of all six companies under the group, namely: Uniwide Sales Inc., Uniwide Holdings Inc., Naic Resources & Development Corp., Uniwide Sales Realty and Resource Corp., First Paragon Corp. and Uniwide Sales Warehouse Club Inc.

The order reaffirmed a decision of the SEC hearing panel in 2009 to terminate the Uniwide group’s rehabilitation. The Uniwide group, led by businessman Jimmy Gow, had asked for reconsideration of this order.

This means the assets of the Uniwide group will be liquidated to pay liabilities.

In the ruling, the SEC said it could not accept claim that the group’s remaining debt was now down to only P1.4 billion, adding that the group had also failed to substantiate its claims and debunk findings of a special hearing panel that called for the termination of the rehabilitation.

The SEC said the group had been “insolvent” since 2003, which meant that the company had more liabilities than assets.

Likewise cited by the SEC was the group’s high debt-to-asset ratio, exceeding 1 since 2003 and which had swelled to 4.51 in 2009. A debt ratio greater than 1 means the company has negative net worth and is technically bankrupt, the en banc said.

Based on the current ratio, the SEC said the group was not liquid as short term debts exceeded assets. “This confirms petitioners inability to meet current obligations as they fall due and contributes to petitioners’ insolvency,” the SEC said. Doris C. Dumlao