Philcomsat in danger of being liquidated

With no proxies validated, Philcomsat Holdings Corp. may find itself the subject of liquidation or dissolution proceedings as its corporate life is set to expire tomorrow.

This as the Securities and Exchange Commission disallowed the use of proxies and instead required the original owners of PHC to vote.

"The corporation will die on May 9 because no proxies were validated. You need the Philcomsat shares to get the two-thirds required by law to conduct a meeting. When it gets dissolved, PHC’s assets will be distributed among shareholders," said Victor Africa, president of both Philippine Overseas Telephone Corp. and Philippine Communication Satellite Corp.

Africa leads a group of stockholders with combined holdings of 52 percent of POTC and Philcomsat. Africa said he would rather see PHC liquidated than for it to be continued to be run by existing management which he accused of dissipating the assets of the publicly-listed company.

Africa accused the Nieto camp of siphoning funds of the company and resorting to corporate maneuverings just to hold on to their positions in PHC.

PHC, which is owned 81 percent by Philcomsat, has not held any stockholders’ meeting since 2004, when members of the Nieto group elected themselves to the company’s board. Nieto’s nephew was elected chairman, while Nieto was installed as president in addition to sitting on the board.

Africa said the Nieto group refused to recognize the Philcomsat proxy presented by Africa during the 2004 meeting and did not allow him to vote the company’s 81 percent shares in the PHC election.

Sen. Juan Ponce Enrile, a shareholder of Philcomsat, also questioned how Philcomsat spent the P1 billion in cash it received from Philcomsat. He also questioned the hefty salaries, bonuses and benefits received by officers and directors of PHC while the company is losing.

Mounting complaints against the Nieto group’s deliberate refusal to conduct a stockholders’ meeting in 2005 prompted the SEC to order the company to convene its stockholders on May 4.

Africa noted that when the SEC denied Nieto’s motion to defer the stockholders’ meeting, he filed a petition with the Court of Appeals seeking a temporary restraining order to stop the stockholders’ meeting set by the commission.

Nieto has shareholdings of 13 percent. If the government stake of 35 percent is added, his group would have 48 percent.

Africa also expressed surprise at the report that Commissioner Ricardo Abcede of the Presidential Commission on Good Government (PCGG) attended the supposed POTC and Philcomsat meetings convened by the Nieto group, "when Commissioner Nicasio A. Conti has officially written me that he is the commissioner-in-charge of POTC-Philcomsat matters."

The POTC and Philcomsat chief executive also denied the Nieto group’s statement that the March 13, 2006 decision of the Supreme Court invalidated the two companies’ boards of directors both chaired by Erlinda Bildner.

Africa said that what the high court said was that it had no jurisdiction to declare the boards of directors headed by Bildner as the validly elected directors of POTC and Philcomsat.

Instead, the high court referred the issue to the Sandiganbayan for investigation and appropriate action.