SEC Commissioner Jesus Martinez issued the statement after beleaguered power distributor Manila Electric Co. (Meralco) secured approval from the SEC for its stock option plan.
Among the five-man Commission en banc, Martinez was the only one who dissented from the decision to approve Meralco’s request that was submitted last February.
"The Commission has to be more prudent with its powers when it comes to employees’ stock purchase plans, especially in light of the recent meltdown of US energy giant Enron Corp.,"said Martinez.
About 4,200 Enron employees were thrown out of work after the company declared bankruptcy last year in one of the most scandal-ridden cases in the US corporate world.
Last year, Enron’s stock price stood at $80 but last week, nosedived to just 67 cents per share.
Martinez expressed apprehension about the recent approval of Meralco’s stock option plan for its workforce.
"Meralco at the time they applied for exemption of registration of shares that would be offered to employees, had a pending refund case before the Supreme Court. It has obligations to the National Power Corp., and other outstanding costs like foreign exchange losses. It seemed risky then, but more so now with the Supreme Court decision ordering Meralco to refund its customers," said Martinez.
Meralco estimates that the refund will cost around P28 billion. The Supreme Court did not set any value on its decision ordering the refund.
Martinez explained that while Meralco’s situation is so much different from Enron’s, "öffering a stock purchase plan for employees while the company is in a tight financial predicament could prove disastrous for Meralco’s employees."
The power distributor’s total obligations total about P70 billion, covering the refund, Napocor account and the forex losses.
In the en banc deliberations, Martinez was pushing for a clear statement from Meralco’s employees on the sentiment on the stock purchase plan and a confirmation that they were fully aware of the company’s precarious financial condition.
"I made it clear that the employees’ representatives should be asked, but the majority of the Commission approved Meralco’s request just the same," Martinez said.