The Philippine Competition Commission (PCC) warned PLDT Inc. and Globe Telecom against paying the final installment of their multibillion-peso telecommunication deal with San Miguel Corp. (SMC) amid pending cases in court.
PCC said the telcos should allow the courts to decide before making the final move in their P70-billion deal with SMC. The antitrust body said preempting any final decision would only complicate the issue.
PLDT and Globe are scheduled to pay the last tranche of their transaction worth P13 billion to SMC by the end of this month.
PCC said the courts had not even decided yet if these companies were legally entitled to consummate the deal.
“The PCC upholds the principle that all parties should respect and afford the courts the necessary latitude to decide on this issue. The telco firms should not preempt the judiciary’s decision by taking actions, which would make it more difficult to implement forthcoming rulings,” PCC said in a statement.
PCC said the firms’ decision to push through with the final transaction in spite of the pending court reviews “appears to challenge this principle.”
Failing to get the side of the Court of Appeals to side with its efforts to review the deal, the competition body sought for a relief from the Supreme Court in April.
PCC, whose legal battle with the duopoly is seen by many as an important litmus test on the effectivity of the competition law, said the deal was not a simple business transaction, noting that the long-term interest of consumers was at stake.
PCC, in its letters dated June 7 and June 17, 2016, ordered the pre-acquisition review and investigation of the acquisition made by PLDT and Globe of all the issued and outstanding shares and assets of Vega Telecom Inc., a subsidiary of SMC holding the conglomerate’s telecommunication assets.
Pursuant to the sale and purchase agreement executed on May 30, 2016, for an agreed purchase price of P52.08 billion under a deferred payment scheme, the sum of P26.04 billion was paid upon the execution of the contract, P13.02 billion on Dec. 1, 2016, and P13.02 billion to on May 30, 2017.
The main case between the telcos and the antitrust body was whether the acquisition required PCC approval. PLDT and Globe earlier argued the deal should be “deemed approved,” citing the PCC’s own memorandum circulars that were in effect when the deal was launched.
The PCC countered that the required documents submitted by the telcos, namely the transaction notice, were deficient and lacked crucial material information.
The circulars were issued by the PCC to guide merger deals before the implementing rules and regulations (IRR) of the Competition Law were in effect.