MANILA, Philippines -The Securities and Exchange Commission (SEC) will wait for the Supreme Court to decide with finality on the foreign ownership issue involving telecom giant Philippine Long Distance Telephone Co. (PLDT) before implementing changes in the definition of the term “capital”.
SEC spokesperson Gerard Lukban said with PLDT appealing the Supreme Court’s ruling which changed the definition of capital as used by corporations with foreign stakeholders in determining ownership structure, the commission deemed it “proper to keep things in status quo.”
Based on the SC ruling, “capital” should only refer to voting shares or common shares and not the total outstanding capital stock.
The SEC had been computing ownership based on all shares, including non-voting preferred shares.
If the new definition would be used, then 64 percent of PLDT is owned by foreigners; but including preferred shares in the computation, only 13 percent of the telco is owned by foreign nationals.
“We will wait. With the ruling subject of a motion for reconsideration, we can’t implement changes in the definition of capital based on the High Court’s decision,” Lukban said.
The SEC was ordered by the Supreme Court to find out whether PLDT was in violation of the foreign capital limit based on its definition of capital.
Sen. Joker Arroyo said the Senate “cannot at present support any transaction of PLDT until it has corrected its ownership structure.”
“To do so would be to countenance an unconstitutionality,” Arroyo pointed out.
The SC admonished the SEC for its failure to crack the whip when PLDT breached the 40-percent limit on common shares that foreign shareholders can own.