SEC junks VMC petition to maintain status quo

The Securities and Exchange Commission (SEC) has denied the petition of Victorias Milling Co. to defer the appointment of a chief operating officer and maintain a status quo of the company’s operations.

The SEC hearing panel chaired by Director Eugenio Reyes said VMC’s urgent motion for the issuance of a temporary restraining order (TRO) was "devoid of merit."

The SEC said issuing a TRO would defeat the very purpose of the rehabilitation of VMC because the prior orders pertain to the suspension of VMC’s debt payments as well as its rehabilitation.

"A temporary restraining order would allow the creditors to demand payment on their claims and to foreclose on the assets of the corporation which are needed in its rehabilitation," the SEC panel said.

VMC had asked for a TRO to maintain the status quo pending the resolution of the appeal it filed with the SEC. It said without the TRO, VMC will suffer irreparable injuries, among others, the possibility of the refusal of sugar planters to mill with VMC as many of them have expressed the desire that pending final resolution of all issues, the status quo be maintained.

The SEC-appointed VMC management committee tasked to formulate and negotiate for the company’s rehabilitation had announced on Dec. 28, 2000 the appointment of Arthur Aguilar, the former general manager of the state-owned National Development Co., as COO.

The VMC mancom issued the order in view of a prior order dated Nov. 29, 2000 which put in place a rehabilitation plan for the sugar company. The SEC said there was also a need to appoint a COO because of the irrevocable resignation of Manuel Manalac as VMC president and CEO, director and mancom member effective Jan. 31, 2000.

"Hence the action of the Mancom in appointing the chief operating officer is but a way by which the Mancom can fulfill one of its functions, which is to operate the business of VMC," the SEC said. – Conrado Diaz Jr.