“Under prevailing jurisprudence, public utilities that fail to comply with the nationality requirement under Section 11 Article XII and the Foreign Investments Act can cure their deficiencies prior to the start of the administrative case or investigation,” the high court said.
The high court added that once the June 28, 2011 decision becomes final, the Securities and Exchange Commission “shall impose the appropriate sanctions only if it finds after due hearing that, at the start of the administrative case of investigation, there is an existing violation of Section 11, Article XII of the Constitution.”
In its June 28, 2011 ruling, Section 11 Article 12 of the Constitution meant that “capital” should be the shares of stock entitled to vote in the election of directors and thus refers only to common shares and not to the total outstanding capital stock.
The high court dismissed the motions for reconsideration filed by PLDT chair Manuel Pangilinan, Philippine Stock Exchange, Napoleon Nazareno and the SEC.
The high court, in dismissing the motions of Pangilinan and Nazareno, said that their allegation that their rights to property and right to due process will be violated with the SEC’s investigation is misplaced.
“Since the Court limited its resolution on the purely legal issue on the definition of the term “capital” in Section 11 Article 12 of the 1987 Constitution and directed the SEC to investigate any violation by PLDT on the 60-40 ownership requirement in favor of Filipino citizens, there is no deprivation of PLDT’s property or denial of right to due process,” the high court said.
It added that it can present evidence before the SEC of its compliance with the constitutional requirement once the SEC started with its investigation.
The high court pointed out that they refrained from ruling on whether PLDT violated the Constitution because “such question indisputably calls for a presentation and determination of evidence through a hearing which is generally outside the province of the Court’s jurisdiction but well within the SEC’s statutory powers.”
The case stemmed when lawyer Wilson Gamboa filed a petition with the Supreme Court , in his petition said since foreign interests, notabley First Pacific Company own at least 61.8 percent of PLDT’s outstanding common stocks, PLDT can no longer be regarded a Philippine national.
Gamboa said, First Pacific Co. is the Hong Kong based investment firm of the Salims of Indonesia and NTT DoCoMo, the wireless subsidiary of NTT of Japan.
Gamboa filed a petition for injunction and annulment on the sale of the P26.5 billion worth of PLDT shares to First Pacific in 2007.