Legal setback
The Government Service Insurance System’s (GSIS) bid to wrest control of the Manila Electric Company (Meralco) from the Lopez group may have met with very serious setback after the Court of Appeals declared the cease-and-desist order (CDO) and show-cause order (SCO) issued by Securities and Exchange Commission (SEC) commissioner Jesus Martinez against Meralco as void ab initio.
The disputed orders were issued in connection with last May’s stockholders meeting and election for the members of its board of directors. In a lengthy resolution penned by CA Associate Justice Vicente Roxas, the CA said the SEC lacked jurisdiction over intracorporate disputes, now a power vested in the Regional Trial Courts.
It also assailed the forum shopping by GSIS and the “splitting of causes of action” by GSIS lawyers. The CA permanently restrained the SEC from implementing the CDO and the SCO and ruled that the complaint filed by the GSIS in the SEC questioning proxy votes for the Lopez group “is barred from being considered”.
The CA also appears to be eyeing sanctions against GSIS lawyers for “unauthorized practice of law”, and for several alleged violations of the oath of lawyers, including forum shopping, doing work that properly belongs to the Office of General Corporate Counsel and splitting of causes of action.
The business community believes that the CA ruling would provide some breather from the intense legal and word war arising from the battle for control of the Meralco boardroom.
The legal community, on the other hand, believes that GSIS still has available remedies, including filing a motion for reconsideration before the CA, or asking the Supreme Court for a restraining order on the implementation of the CA ruling, although some argue that both may not be feasible. An MR would require new grounds that would make the CA overturn its own decision, for one. It is also seldom that the SC issues a TRO against the appellate court.
Another view is that the CA decision will usher in a period of relative peace in the tumultuous power sector. A hiatus in this classic corporate conflict should give the GSIS president time to attend to other issues, including the brewing war with vehicle insurance companies on the CTPL and the escalating row with National Press Club directors whom he recently charged with estafa.
Meanwhile, the legal community took its hat off to Justice Roxas, who earlier came under heavy criticism after issuing a TRO on the SEC orders. Due to the intense assault in media, some thought Justice Roxas would either inhibit from the case or succumb to the strong pressure.
But Justice Roxas stood his ground. Some quarters may not agree with the ruling he penned. A backlash is not far-fetched. But the fact remains that he did what he believes was the right thing to do.
A dangerous precedent
Free text messaging, an idea accidentally brought up by Transportation Secretary Leandro Mendoza in a talk with reporters over another issue, was not supposed to have been taken seriously.
According to sources, Mendoza, realizing that free texting is simply not a good idea being anti-business and confiscatory, instead asked the National Telecommunications Commission to find ways to reduce interconnection charges for both voice and text messaging to bring down call and text rates because surely, nothing in this world is for free, except probably for the air we breathe.
We all thought that the matter of free text messaging has been laid to rest, until House Bill 456 which prohibits telecommunications companies from imposing fees on text messaging was proposed.
If text messaging was such an essential commodity, then wouldn’t it benefit the public more if rice, petroleum products, water, and electricity became freebies? For making Philippine telecommunications world-class and after risking billions of pesos to make communications costs cheaper, telcos are now being penalized. If telcos were to stop providing text messaging because it would no longer make any business sense, can government fill in the gap?
Globe Telecom, in its position paper on HB 456, hit the nail right on the head when it warned that what the bill is proposing is unrealistic, not workable, and may even be damaging ultimately to the public. If texting becomes free, networks will be clogged. Even the quality of voice calling will deteriorate. Do not expect the telcos to expand their networks. How can they possibly justify additional investments to their own shareholders when there will be no return on said investments?
But what the proponents of the bill are probably forgetting is that they cannot just take away private property without paying just compensation. How can our legislators mandate a zero rate for text messaging without the same issue first being subjected to notice and hearing? Even telcos are entitled to due process, lest they are forgetting.
And as already mentioned, why single out text messaging? Why not give away gasoline, electricity, and water for free? Isn’t singling out text service providers a violation of the equal protection guarantee under the Constitution?
As ruled by the Supreme Court in the case of Philcomsat vs Alcuaz, the power of the State to regulate the conduct and business of public utilities is not the power to destroy.
We are also sending the wrong signal to the whole world that doing business in the
Not so Hidden Agenda
There have been persistent rumors that at least two huge local banks are in negotiations to acquire Security Bank. The SB management says there is absolutely no grain of truth to these rumors. In fact it is SB which is eyeing to acquire one. Some sectors in the banking community that the rumors can be due to two things: first, an underhanded strategy to dampen the shining performance of SB; and second, SB people, SB’s extremely loyal immensely talented executive which are the bank’s primary asset, have become a target for other banks who want to lure them.
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