SEC rejects CBCPNet petition for dissolution

The Securities and Exchange Commission has rejected CBCPNet’s petition to dissolve and be placed under the former’s protective custody, virtually quashing the Church-affiliated Internet firm’s prayer of salvaging its remaining assets.

In an en banc decision, the country’s corporate regulator dismissed, for lack of jurisdiction, CBCPNet’s motion to dissolve the company and place it under an SEC-appointed management committee.

The SEC said CBCPNet’s petition for dissolution primarily shows that it involves "mismanagement, auditing, and possible criminal action," which should be handled by the regular courts.

"On its face, the complaint of the minority stockholders of CBCPNet Corp. appears to be a petition for dissolution as an off-shoot of an intra-corporate dispute, redress of which should have been properly sought in the courts of general jurisdiction," the SEC said.

CBCPNet’s minority shareholders, all top officials of the Catholic Bishops Conference of the Philippines, sought the company’s dissolution after alleging that the majority stockholders, spouses Eman and Mardie Lim who likewise managed the company, brought it into financial ruin in less than six months of operations by amassing an estimated P177 million in debts.

The Church officials also sought from the SEC safeguards to preserve or recover the company’s assets and protect the claims of its creditors and other affected parties but the CBCPNet minority shareholders failed to furnish the agency with the necessary documents, such as the record of actual assets and liabilities, within a 10-day period which expired last June 13.

"The commission may motu propio create and appoint a management committee, board or body to undertake the management of corporations in appropriate cases. However, the absence of a clear listing or record not only of the actual assets and liabilities of CBCPNet but other pertinent facts which would tend to show that the matter at hand may be prejudicial to the interest of minority stockholders, parties-litigants or the general public as well, the commission would be unable to act in a definitive manner as to what the management committee to be created should then be managing, or what particular assets or properties should then be preserved, or which creditors are to be protected," the SEC decision noted.

It added that the failure of the complainants to act on these grounds indicate that they may have themselves "lost interest in their cause."