SEC to take over bankrupt CBCPNet

The Securities and Exchange Commission intends to take over the management of the bankrupt Internet firm CBCPNet Corp. to protect the company’s assets while waiting for a court ruling on its dissolution, an SEC official said yesterday.

SEC Commissioner Jesus Martinez said the corporate regulator would likely appoint a lawyer and an accountant to conserve CBCPNet’s assets until the regular courts rule on the company’s closure.

Under the new Securities Regulation Act, the SEC regulates all corporations in the country but only regular courts may order their dissolution.

Martinez also ordered concerned parties to appear before the SEC on May 29 to discuss asset preservation schemes.

"The meeting is being called not to discuss dissolution because SEC no longer has jurisdiction over that issue. Our foremost concern is to ensure asset privatization," Martinez said.

"That is why we wish to make clear to all parties concerned that the involvement of SEC at this point is not to see this thing through its final resolution but initially just to prevent the situation from further deteriorating, a scenario that can adversely affect the interest of investors which we are mandated to protect," he added.

CBCPNet is the joint venture incorporated by Catholic Church officials Lingayen-Dagupan Archbishop Oscar Cruz, Bataan Bishop Honesto Ongtioco and Right Rev. Pedro Quitorio with Twins Inc., a company owned by the couple Eman and Mardie Lim.

Although the company banners the corporate style name of the Catholic Bishops’ Conference of the Philippines (CBCP), it was a distinct corporation with the Lims as majority owners. The Lims have reportedly gone into hiding.

Using borrowed capital from about 30 creditors for the Internet firm’s bandwidth lease and other equipment needs, the Lims allegedly diverted CBCPNet’s funds to Twins Inc. without board approval.

CBCPNet was forced to stop operation last year after the prelates learned of its massive debts, unaccounted for by the Lims.

CBCPNet allegedly tapped several major telecom and information technology companies, among them publicly listed Globe Telecom, Philcomsat and PhilWeb. com, to support the project which aimed to provide network services to parishes and Catholic schools all over the country.

PhilWeb, for instance, advanced P4 million in June 2000 to finance capital expenditures and operating expenses under a memorandum of agreement where CBCPNet would provide PhilWeb with sites to establish a total of 1,255 Internet cafés all over the country.

However, after much delay, CBCPNet submitted a list of only 26 proposed sites, most of which were found to be unfeasible by PhilWeb’s technical staff due to commercial considerations.

With the support of creditors, CBCPNet formed another Internet venture, CBCP World, to shoulder the debts of CBCPNet and recoup its losses.

The new company was incorporated by the same three prelates but involved a new partner, Transpacific Broadcast Group International, which won over five other bidders.