NSC creditors ask SEC to fire liquidator

Creditor banks of distressed National Steel Corp. (NSC) have asked the Securities and Exchange Commission to fire its appointed liquidator, former SEC associate commissioner Danilo Concepcion, whom they charged of acting in bad faith and taking actions prejudicial to the interest of the bank consortium.

In an urgent omnibus motion filed last Jan. 31, the banks said the SEC should require Concepcion to explain why he made invitations to lease out NSC’s steel plant in Iligan City without consulting the creditors. At the same time the group asked the corporate watchdog to issue a cease-and-desist order (CDO) to bar Concepcion from entering into any lease agreement or negotiate with any prospective lessee under certain terms and conditions not known to the creditor-banks.

Concepcion was appointed to the steel firm’s liquidator late last year following the failure of its interim receivers to craft a rehabilitation plan acceptable to the firm’s Malaysian owners Hottick Investments and the subsequent failure of Hottick to present an alternative proposal, particularly to find a "white knight" to infuse the badly-needed equity into NSC.

With the impending liquidation, NSC’s creditors will be given first crack for its valued at P29.965 billion, the bulk of which are in the form of property, plant and equipment in its Iligan plant.

Before its closure in November 1999 and a debt moratorium order from the SEC, NSC has been saddled with loans of over P16 billion.

The NSC creditors charged Concepcion of discriminately sending out invitations to a limited group which includes Allengoal Steel Trading and Fabrication Inc., which has existing debts with NSC.

"We note that during the rehabilitation proceedings of the instant matter, the said debtor-company had already offered to lease the plant, but the said offer was collectively refused by the creditor-banks in view of serious doubts on Allengoal’s financial and technical capability and the fact that the creditor-banks found the offer unrealistic," the group noted. – Conrado Diaz Jr.