SEC penalizes Gonzales group amid Medical City row
A special hearing panel of the Securities and Exchange Commission has penalized an investor group allied with Jose Xavier Gonzales in relation to the battle for control for The Medical City (TMC).
The SEC unit cited the majority shareholders of Professional Services Inc. (PSI), the owner and operator of TMC, for violation of certain rules in the Securities Regulation Code (SRC), particularly a buy-in disclosure requirement as well as the tender offer requirement.
The special hearing panel was convened after several shareholders, including PSI chief executive officer Alfredo Bengzon, questioned the acquisition of the company’s majority shares by entities related to his nephew, Gonzales.
In a resolution issued on November 22, the panel found Viva Healthcare Limited, Viva Holdings (Philippines) Pre. Ltd. and Felicitas Antoinette Inc. (FAI) liable for violating Section 18 of Republic Act No. 8799, or the SRC.
Section 18 of the SRC requires any person who acquires directly or indirectly the beneficial ownership of more than 5 percent of equity securities to report the same to the issuer, the exchange where the security is traded and the SEC within 10 days.
The SHP likewise held Fountel Corp., Viva Healthcare, Viva Holdings and FAI accountable for violating SRC rule 19.2.A and 19.12 of the 2003 amended implementing rules and regulations of the SRC, the applicable rules at the time of the violation.
SRC rule 19.2.A provides that any person, or group of persons acting together, who intends to acquire 35 percent or more of a public company’s equity shares must disclose such intention and contemporaneously make a tender offer to all shareholders.
Pertaining to tender offers, SRC rule 19.12 describes as fraudulent, deceptive or manipulative the omission to state any material fact necessary that could otherwise result in misleading statements.
All in all, penalties amounted to at least P50.25 million.
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