Court bars BSP, SEC actions on UOBP

A local court has barred government regulators Bangko Sentral ng Pilipinas (BSP) and the Securities and Exchange Commission (SEC) from acting on all corporate transactions of the United Overseas Bank of the Philippines (UOBP).

Judge Artemio Tipon of the Manila Regional Trial Court Branch 46 issued a writ of preliminary injunction restraining BSP Governor Rafael B. Buenaventura and SEC Chairperson Lilia Bautista from approving the application for increase of the authorized capital stock of UOBP, the local unit of the Singaporean bank.

The issuance of the preliminary injunction stemmed from a petition filed by UOBP’s minority bloc led by the Farmix Group which consists of the Farmix Fertilizer Corp., Pearl Bank Securities Inc., Manuel Tankiansee and Juanita U. Tan, which used to have control of over 10-percent equity in the bank.

The Farmix group is a petitioner-in-intervention and part of the minority bloc of Filipino businesses and individuals with stakes in UOBP led by the group of former Finance Secretary Edgardo Espiritu and Jollibee Food Corp. president Antonio Tan Caktiong.

Tipon’s order cited that the approval of the public defendants (BSP and SEC) of the transfer of rights over the contested shares of stock of UOBP prior to the final resolution of the issue of ownership "will

result in the validation of the transfer of stock in favor of the defendant (UOBP) and effectively preempt any judgment to be rendered by the court with respect to the issue of ownership over the contested shares of stock."

"Unless, therefore, the public defendants are prevented from approving the subject transactions, any judgment secured by plaintiffs herein will be rendered nugatory and ineffectual," the order stated.

It added that the issuance of a writ of preliminary injunction against the BSP and SEC officials "are in order considering that the sole object of a preliminary injunction is to preserve the status quo until the merits of the ownership case can be heard."