Court junks Tan's P105-M suit vs PSE

The Pasig City Regional Trial Court (RTC) threw out yesterday the P105-million damage suit filed last month by BW Resources Corp. majority owner Dante Tan against the troubled Philippine Stock Exchange (PSE).

Pasig Judge Jose Hernandez, in a resolution last March 3, said he has jurisdiction over the case and refused to extend a 72-hour temporary restraining order (TRO) he issued against the PSE on the investigation of Tan.

In another development, Revenue Commissioner Dakila Fonacier said the Bureau of Internal Revenue (BIR) has formed a special task force that will look into the possible tax liabilities of BW Resources.

In a breakfast forum at the Ristorante La Dolce Fontana in Greenhills, San Juan, Fonacier said the team would zero in on the alleged capital gains tax liabilities of the gaming firm.

In his five-page resolution, Hernandez said he cannot rule on the "wisdom, propriety and legality of the order" of the Securities and Exchange Commission (SEC) calling for a probe of Tan's alleged insider trading and stock manipulation at BW Resources.

Tan's counsel, Agnes Maranan, said they were "surprised" by Hernandez's decision and would appeal it before the Court of Appeals in due time.

Maranan explained that what they filed before the Pasig RTC was "an action for damages cognizable by a regular court.

"This case cannot be filed at the Securities and Exchange Commission because it is not mandated to handle cases wherein the concerned party is an outsider," she said.

She also explained that the SEC is an "intra-corporate" body and only has jurisdiction on cases involving corporations, stockholders, directors and officers.

"But Mr. Tan does not belong to any of these categories because he is a private person, and therefore not a member of the corporation," Maranan said.

She also questioned Hernandez's refusal to extend the TRO on the PSE.

"This is the problem. We don't have any idea what the PSE is doing, if they are still continuing their investigation. Even during the Almadro report we have never been notified nor did they ask for our side," Maranan said.

On Feb. 23, Pasig RTC Executive Judge Rodolfo Bonifacio issued a 72-hour TRO preventing the PSE, its Business Conduct and Ethics Committee and other divisions and offices from continuing their investigation into the alleged insider trading and stock manipulation of BW shares.

Tan's lawyers also demanded that the PSE and lawyer Ruben Almadro, the chief of the PSE Compliance and Surveillance Group, to pay P105 million in moral, actual and exemplary damages, including attorneys' fees.

At the Greenhills forum, Fonacier said it is likely that BW earned some P10 billion in profits from the sale of its shares in the stock market and that the BIR stands to collect P1 billion from this transaction.

Under current laws, a listed company is slapped a tax of one-half of one percent in financial gains tax or 10 percent of total transaction value.

"If this figure (P10-billion profit of BW) is true, then we will be happy because we will collect P1 billion in additional revenues this year," Fonacier said.

He said the special task force is now poring over the "voluminous books" of the PSE to determine the tax liabilities of BW.