Businessman Ramon "RJ" Jacinto has asked the Court of Appeals to allow him to regain control of the First Women's Credit Corp., the management of which had been stripped from him by the Securities and Exchange Commission.
Jacinto and Jaime Colayco, FWCC directors, said the SEC abused its powers when hearing officer George Palmares issued in November last year an order creating an interim management committee to take over the management of the lending firm.
The two, who filed the petition in retaliation to the derivative suit filed by Japanese Shig Katayama, a minority stockholder, told the appeals court the SEC is really "determined" to implement the order as Palmares even directed the PNP to place the committee "under its possession and control."
While the duo appreciated the temporary restraining order issued by the SEC last December, but which had lapsed last Jan. 17, they reminded the commission and Katayama that it is the board of directors which calls the shots, pursuant to Section 23 of the Corporation Code.
They also invoked Presidential Decree 902-A which acknowledges the appointment of an interim committee, but that this is just one of the "extraordinary remedies which are drastic and with a far reaching effect."
Their lawyer, Manuel Singson, said Section 6 (d) of the law provides that this can only be done "when there is imminent danger of dissipation, loss, wastage or destruction of assets or other properties or paralization of business operations."
Katayama had claimed Jacinto and Calayco has misused FWCC funds amounting to P535.2 million by making advances and extending loans to the Jacinto Group of Companies.
The foreign investor had sought a takeover of FWCC's management, and that this was the "best way to salvage and protect the interest of the minority stockholders and creditors."
But Jacinto and his colleague denied the acquisition of the questionable loans, saying the Jacinto Group even "lent money to FWCC in the amount of P250 million to restart its lending activities after Katayama reneged in his commitment to fund lending activities."
What caused the loss of funds and assets of FWCC was the faulty lending operation under Katayama himself which resulted in the failure to collect about 80 percent of the more than P1 billion loan to persons and entities not belonging to the Jacinto Group of Companies," Jacinto defended.
Jacinto, Colayco and Angelo Bonoan Jr., FWCC directors, were indicted last week by the Department of Justice (DOJ) before the Mandaluyong City regional trial court after they allegedly misused P16.2 million in corporate funds.