Bernas says PSE directors cannot be shortlisted

Noted Constitutionalist Fr. Joaquin G. Bernas asserted that the Securities and Exchange Commission (SEC) has erred in its interpretation of the Securities Regulation Code (SRC) as he insisted that the directors of the Philippine Stock Exchange (PSE) cannot be shortlisted.

Bernas, law dean of Ateneo de Manila University, said there is nothing in the SRC that "changes the process of choosing directors found in the Corporation Code" which sets forth that directors stand for election.

"What the SRC contains are new provisions on qualification of directors, but nothing about elections or appointments. What this means is that the provisions of the Corporation Code remain unchanged," Bernas said.

Bernas, in effect, opposes the move of SEC Chairman Lilia R. Bautista to let the nominations and election committee (Nomelec) of the PSE to go on with the shortlisting of directors, a process which Bernas frowns upon.

"He said that he has consistently opposed, during PSE board meetings, the shortlisting of qualified nominees and even the "appointment of directors to fill vacancies." This is why, he said, he cannot accept his shortlisting as he opposes the process as it is not in accordance with the provisions of the Corporation Code.

Bernas also argued against the position of the SEC that the power to shortlist and to appoint directors flows from the intent of the SRC. "The constant teaching I know is that implicit amendments of explicit provisions are frowned upon especially when they are claimed in a self-serving manner," he said.

He also said that the presumption on SEC’s Circular 16’s validity is just a prima facie presumption which can be rebutted and defeated. This is why he declined the shortlisting, even if he was a beneficiary since the Corporation Code mandates election.

Bernas’ arguments bolstered the position taken by four former chairmen of the PSE in the course of the discussions on the furor caused by the steadfast refusal of the SEC to allow directors to stand for elections.

The four are Trina Kalaw, Robert Coyiuto Jr., Harry Liu and Felipe Yap. All maintain the need for candidates, even for the non-broker candidates, to stand for election.