Direct new ASB receiver to begin work, SEC asked

Former Securities and Exchange Commission (SEC) Chairman Perfecto Yasay Jr. urged yesterday the Securities and Exchange Commission (SEC) to ignore a court order and direct the new receiver of ASB Holdings to formally assume her duties, warning that failure to do so might be fatal to the company.

At the same time, Yasay scored the Court of Appeals (CA) for issuing last June 25 a "flawed" temporary restraining order (TRO) resulting in extreme prejudice to the distressed ASB.

Yasay also called on the SEC to question before the Supreme Court the issuance of the TRO and preliminary injunction by the Appellate Court enjoining the dismissal of Fortunato Cruz as ASB receiver.

Yasay pointed out that the CA’s decision had no force and effect on the SEC order ousting Cruz as ASB receiver because his replacement, lawyer Rosario Bernaldo, had already posted the required bond and taken her oath of office five days prior to the issuance of the TRO.

The SEC terminated Cruz as ASB receiver last May 26, while the CA issued its TRO one month later, when the act sought to be restrained had been completed.

According to Yasay, the CA order has no force and effect on the appointment of Bernaldo, hence, the SEC should immediately require her to implement the rehabilitation plan for ASB.

To correct the "grave injustice" committed against ASB, Yasay said the SEC should contest the CA-issued TRO and subsequent injunction to the High Tribunal.

He said the SEC should have immediately gone to the Supreme Court on a certiorari to question the "arbitrary and whimsical action on the part of the Court of Appeals."

Earlier, Yasay rallied behind the SEC decision to fire Cruz as ASB receiver for alleged incompetence and for placing his personal benefits over the interest of the company under his receivership.

The former SEC chairman also backed creditors of distressed firms Clothman Knitting and Ramcar Inc. who wanted Cruz out as their receiver for the same reason: Exorbitant fees and lack of competence.

Yasay charged that Cruz misled the CA by stating in his petition that he was dismissed by the SEC on the basis of the fees that he was entitled to. Cruz allegedly claimed that the ASB creditors lost confidence in him simply because of the exorbitant fees he was charging for his services.

"If you are confronted with a situation where very clearly the receiver is acting for the protection of his personal interest over and above his fiduciary functions, that by itself is a basis to have him dismissed immediately," Yasay said.

SEC records of the case show that Cruz was demanding payment of P15 million as his commission for securing the release by the Bureau of Internal Revenue of over P150- million worth of tax credit certificates (TCCs) in favor of the ASB.

The P15 million is over and above his receiver’s fee of P200,000, plus P175,000 for expenses a month, which was already way behind the P50,000 ceiling prescribed by the SEC.

The SEC junked for lack of merit Cruz’s motion to be allowed to collect the P15 million, saying his efforts pertaining to the TCCs were merely part of his fiduciary duties as SEC-appointed receiver.