No merger offer for Equitable PCI for now -- bank chairman

REPORT FROM BUSINESSWORLD There is no offer to merge Banco de Oro Universal Bank with Equitable PCI Bank, the latter’s stockholders were told on Tuesday. "That’s speculation... There is no merger proposal on the table," Equitable PCI chairman Corazon S. de la Paz said at the bank’s stockholders’ meeting. Banco de Oro, the banking arm of the SM Group, which is Equitable PCI’s biggest shareholder, offered to merge with Equitable PCI last Jan. 6. The merger was supposed to be via a share swap of 1.6 Banco de Oro shares for every Equitable PCI stock. But Equitable PCI had not accepted the offer by the end of January, the deadline set by Banco de Oro. Also on Tuesday, Equitable PCI barred the Romualdez family from voting Trans Middle Equities’ (TMEQ) 7.13% stake in the bank, pursuant to the Sandiganbayan order issued the other day. Last Monday, the anti-graft court issued a six-page resolution compelling compliance with a temporary restraining order (TRO) issued by the high court in 1992, which it said was still in effect. That restraining order prevented both the Romualdez clan and the Presidential Commission on Good Government from voting the Equitable shares registered under TMEQ, an alleged dummy corporation used by the family to amass ill-gotten wealth during the Marcos years. TMEQ’s legal counsel tried to block the board decision by invoking a Supreme Court resolution issued on Tuesday. But Supreme Court resolution merely asked the government and the board of directors to comment on TMEQ’s plea to nullify the restraining order. Because the Supreme Court had not nullified the restraining order, Equitable PCI Corporate Secretary Sabino Acot Jr said the Sandiganbayan ruling stands. "I am confused," said Ferdinand Martin G. Romualdez, current vice-chairman and TMEQ nominee. The high court issued the order in 1992, but the family was allowed to vote their shares at last year’s stockholders’ meeting. TMEQ nominees were part of the list of candidates for the bank’s 2006 board. Because there were 25 nominees for the 15 board seats, the board decided to give shareholders 60 minutes to cast their votes. Auditing firm SGV & Co. was tasked to tally the votes. The results were not yet ready as of press time. Meanwhile, both bank directors Winston F. Garcia and Reynaldo G. Palmiery -- both from the Government Service Insurance System, which owns about 12% of the bank -- were absent in in Tuesday’s meeting. Mr. Garcia was said to be in Spain while Mr. Palmiery was in Prague. In a related development, a court insider said the Sandiganbayan decision to bar the Romualdezes from voting their shares does not preclude the Court of Appeals from ruling on the injunction plea filed by TMEQ. This even as the appellate court refused to grant the Romualdez clan’s plea to stop the nominees of the SM group from being elected to Equitable PCI’s board. Last May 17, TMEQ asked the appellate court to stop SM nominees Teresita T. Sy, Edmundo L. Tan, Josefina N. Tan, Exequiel P. Villacorta, Jr. Gregory L. Domingo, Jose T. Sio, Harley T. Sy, Rogelio R. Cabunag and Antonio A. Henson from sitting on the bank’s board. The appellate court, however, ruled that the plea lacked basis, the source said. "We refused to issue a TRO because we looked into the entire picture. There should be no doubt on the equities and legalities of the case. It should be clear. There is no basis for a TRO," an insider of the appellate court’s third division, which handles the case, said. "But right now, we are not in the position to dismiss the petition outright," the court official added. The court official explained that the justices had taken into account the opposition filed by the Sy group. The appellate court is expected to issue a resolution within the week ordering the SM group comment on the TMEQ plea. "We will still decide if an injunction [on the SM group] is warranted," the court official said. The official noted that the Sy group’s comment would be crucial to the case. -- M.E.P. Osorio and M.E.I. Calderon/BusinessWorld