SEC penalizes Gonzales group for violation of securities laws
The Securities and Exchange Commission has penalized the group affiliated with Jose Xavier Gonzales for violating securities laws as it battled for control of The Medical City.
In a statement, the SEC said a special hearing panel had cited the majority shareholders of Professional Services Inc. (PSI), the owner and operator of TMC, for violation of buy-in disclosure and tender offer requirements provided by the Securities Regulation Code. Penalties totaled P50.25 million.
The special hearing panel was convened by the SEC 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.
“We are extremely gratified that the SEC has decided in favor of all the legitimate shareholders of The Medical City,” Bengzon said in a separate statement.
The panel resolution dated Nov. 22 said that Viva Healthcare Limited, Viva Holdings (Philippines) Pre. Ltd. and Felicitas Antoinette Inc. (FAI) were 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.
SRC rule 19.2.A provides that any person or group acting together who intends to acquire 35 percent or more of a public company’s equity shares must disclose such intention and make a tender offer to all shareholders.
In its resolution, the panel found Viva Healthcare, Viva Holdings, FAI and Fountel to have acquired majority of PSI shares through omission of material facts, misleading the board of directors and other shareholders to approve increases in the company’s capital stock and allow the respondents to increase their shareholdings.
Viva Healthcare, Viva Holdings, FAI and Fountel managed to increase their collective shareholding to over 50 percent, largely through subscriptions during the company’s capital stock increases, from one million to two million shares.
Gonzales’ camp, however, said yesterday that they remained firmly in control of TMC despite the SEC decision.
Speaking to Inquirer, a source from Gonzales’ side said the decision of the corporate regulator also did not contest the fact that the medical institution is now under new management. INQ
