VMC board hits mancom for appointing COO

The board of Victorias Milling Co. (VMC) lashed out at the Securities and Exchange Commission (SEC) for upholding the appointment by the SEC-appointed management committee (mancom) of former National Development Co. general manager Arthur Aguilar as VMC chief operating officer (COO).

In a 32-page petition for certiorari filed with the SEC, VMC director and chief financial officer Romeo Hermoso insisted on a status quo prior to the mancom order, dated Nov. 29, 2000, installing Aguilar as COO.

Hermoso said the VMC mancom went beyond its limitations as an oversight committee in appointing Aguilar who is not qualified being not a present and regular VMC employee.

"To oversee is to supervise, which is different from the power of control," he said.

Hermoso said the power to appoint a COO rests solely on the board, which exercised this function with the designation of Abelardo Bugay as COO last Jan. 8.

The SEC had earlier denied VMC’s petition to put on hold the appointment of a COO and maintain a status quo of the company’s operations for being 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.

But VMC said without the TRO, it would 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 said it issued the order in view of the need to appoint a COO because of the irrevocable resignation of Manuel Mañalac 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.