SEC upholds Capitol Hills prexy, officials over MOA

The Securities and Exchange Commission through its hearing officers Rosalinda Tividad -- Tesorio and Rosita Guerero upheld the integrity of Capitol Hills president Pablo B. Roman Jr., and officials of Capitol Hills when it denied the creation of a management committee as petitioned by Manuel Sanchez in a case filed for injunction before the SEC.

Sanchez sought to enjoin the implementation of the memorandum of agreement between Capitol Hills and Ayala Land for the development of world-class 36 holes golf courses in Montalban, Rizal, on the ground that the deal will result to possible loss, wastage and dissipation of corporate assets.

The SEC said in its decision dated May 22, 2000 that "Petitioner failed to substantiate the possible loss, wastage and dissipitation of corporate assets, hence the same is hereby denied."

In answer to news reports that Roman was made to account for the P144 million in advance because Mark Dayrit who heads Pacific Asia testified that some money went into some unnamed "crucial pockets" was maliciously quoted out of context.

The text of the decision does not hint of any anomaly, it says: "Considering that respondents (Capitol Hills) have not presented document (Deed of Sale) during the proceeding, except the irrevocable option to buy, it becomes imperative that the respondents should account the aforesaid amount if only to enlighten the Capitol's Stockholders."

Why was there no deed of sale? This question has repeatedly been answered. The lands purchased have not been exempted from DAR coverage. They cannot be the subject of sale. The best that Capitol Hills can offer is an irrevocable option to buy which can be exercised with the execution of a deed of sale once the lands are exempted from DAR coverage.

The "crucial pockets" referred to by Dayrit (in the newspaper account) are the crucial expenses in the consolidation of the properties that needed to be paid for, such as the surveyors, tenants, squatters, etc. which are not at all part of the price of the property but crucial nevertheless if the property has to be acquired.

The SEC never said that the memorandum of agreement (MOA) is legally defective. What the SEC said was that the condition preceded must first be complied with before the MOA is enforced. At present, all the conditions precedent have already been complied with.

The SEC gave the parties, Ayala Land Inc. and Capitol Hills, the go-ahead signal to pursue the project as embodied in the MOA after the conditions precedent are complied with.