FBDC calls PSE demand unreasonable

Fort Bonifacio Development Corp. (FBDC) said the demand of the Philippine Stock Exchange (PSE) for FBDC to commence within 10 days from receipt of its July 23, 2001 demand letter, the construction of the exchange’s premises for a unified trading floor in Bonifacio Global City, is premature and unreasonable, and without legal basis.

In a letter to the PSE counsel dated July 27, 2001 FBDC lawyer Estelito P. Mendoza pointed out that what the exchange is asking for is contrary to the provisions of the relocation agreement signed by both parties on Feb. 22, 1999.

Mendoza pointed out that the agreement provides that the plans for the construction of the PSE structure shall be "subject to further design and cost studies and analysis, in coordination with the building committee of the PSE, and are subject to final agreement between the parties." He also clarified that as provided in the agreement, "the actual plans for the construction of the PSE premises shall be governed by the specifications agreed upon by the parties."

Mendoza stressed that since the plans have not been finalized in spite of earnest efforts to finalize the same, it would be impossible to commence the construction of the PSE premises at this time.

He also stated that the relocation agreement requires PSE’s building committee and FBDC to agree on a development program and milestones for the PSE premises. Again, the program still has to be finalized, and therefore, the timetable for the construction of the unified exchange which would be included in the program, has not yet been agreed upon. Hence, the demand for the start of the construction of the PSE premises at this time, is likewise premature.

In spite of the failure of both FBDC and PSE to come to agreement on several points, FBDC endeavored to complete certain tasks. These include completing, at FBDC’s own expense, the design process, including the conceptual and detailed design of the unified PSE building, with FBDC spending a total of P150 million in the process as a sign of its good faith.

The FBDC counsel also emphasized that at this time, FBDC has no legal and financial obligation yet to PSE, and neither is the company also obligated to deliver the deeds of donation covering the subject property. As provided in the agreement, this obligation "arises only upon completion of the development program and agreed milestones, Mendoza stated.

Other provisions in the 1999 relocation agreement that have yet to be finalized or implemented, also hinder construction of the PSE Building by this year, Mendoza added.

Mendoza further stated that, as provided for in the relocation agreement, the only remedy available to PSE in the event that both parties fail to reach an agreement, is that PSE can enter into discussion with a third party regarding the subject of relocation and unification of its headquarters.