PLDT gets SC decision junking case vs. SEC ruling on foreign ownership

The Supreme Court has dismissed a petition against Securities and Exchange Commission (SEC) Chairman Teresita Herbosa questioning the corporate regulator's guidelines on foreign ownership, particularly regarding PLDT Inc.'s equity structure.

In a disclosure to the Philippine Stock Exchange on Friday, PLDT said it was served a copy of the high court decision – dated November 22, 2016 – concerning lawyer Jose M. Roy III's petition against Herbosa.

In 2013, Roy alleged that Section 2 of the SEC Memorandum Circular (MC) No. 8 Series of 2013 was "tailor-made to accommodate the scheme of PLDT for conforming with the Constitution."

However, the SC decision upheld the validity of SEC-MC No. 8, which requires public utility companies to maintain at least 60 percent Filipino ownership in the total number of outstanding shares of stock entitled to vote directors as well as in total number of non-voting shares of stock.

The high court ruled that Herbosa did not commit grave abuse of discretion when she issued SEC-MC No.8.

The SC rejected the petitioner's argument that the 60 percent Filipino ownership requirement must be applied to each class of shares.

In rejecting Roy's claim, the high court cited its 2011 decision in the Wilson Gamboa Sr. case questioning the sale of PLDT shares to foreign firm First Pacific and claiming that it violated the 40 percent foreign ownership limit in public utilities.

The SC noted it did not make any definitive ruling that 60 percent Filipino ownership requirement was intended to apply to each class of shares.

According to the high court, since Filipinos own at least 60 percent of the outstanding shares of stock entitled to vote directors, which is what the Constitution precisely requires, then the Filipino stockholders control and dictate corporate actions and decisions. — Ted Cordero/VS, GMA News