Equitable PCI Bank asks SC to halt Makati RTC ruling

Equitable PCI Bank asked the Supreme Court yesterday to issue a temporary restraining order (TRO) to halt an earlier ruling issued by the Makati Regional Trial Court that prevented it from voting on its 78.8 million shares amounting to P3.5 billion.

In a 19-page petition for certiorari and prohibition filed by its lawyer Chrysilla Carissa Bautista, EPCI Bank petitioned the High Tribunal to annul the TRO dated July 15, 2005 and the oral order issued by Judge Romeo Barza, denying the motion for reconsideration filed earlier by the bank.

EPCI Bank also asked the SC to prohibit Barza from conducting any further proceedings in the intra-corporate case, docketed as civil case no. 05-594 and entitled "Government Service Insurance System (GSIS) vs. Equitable PCI Bank Inc. and EBC Investments Inc."

"Judge Barza committed a series of acts unmasking his bias in favor of GSIS. Worse, respondent judge encroached, usurped and overstepped the powers vested in the Bangko Sentral ng Pilipinas (BSP) when he ruled that EBC Investments Inc. committed a violation of the banking laws and Monetary Board Resolution no. 842," the bank said in its petition.

The GSIS filed the complaint against EPCI Bank last July 4, seeking to direct the bank to treat the 78.8 million common shares of EBC Investments Inc. in the EPCI Bank and the 68 million shares lodged with the Philippine Central Depository (PCD) as treasury shares, thus permanently enjoining the voting of the shares and excluding them in the determination of the bank’s outstanding capital stock.

On July 8, the GSIS filed an amended complaint with an application for a TRO and writ of preliminary injunction against EPCI Bank, seeking, among other things, to direct the bank and any of its agents and representatives to immediately desist from voting or allowing the voting of the shares and from including them in the outstanding capital stock entitled to vote and in the determination of quorum at the bank’s annual stockholders’ meeting.

The GSIS also asked the Makati RTC to enjoin EPCI Bank "or any person or entity representing it" from resetting or postponing the annual stockholders’ meeting scheduled last July 19.

On July 15, Barza issued a 20-day restraint on EPCI Bank from voting on the shares. He also ordered the GSIS to post a bond amounting to P1 million.

EPCI Bank cited in its petition that under Section 1, Rule 10 of the interim rules of procedure governing intra-corporate controversies, issuance of a TRO is expressly prohibited.

According to EPCI Bank, a party may apply for any of the provisional remedies provided in the rules of court. However, no temporary restraining order or status quo order shall be issued except in exceptional cases and only after hearing the parties and the posting of a bond.

The bank stressed that Barza did not make any factual finding that there existed exceptional circumstances warranting the issuance of a TRO, especially since the GSIS itself admitted that previously they had allowed the subject shares.

Moreover, EPCI Bank emphasized that based on GSIS’ amended complaint dated July 8, its application for a TRO is predicated upon its theory that the subject shares are treasury shares.

The TRO explained that the reason treasury shares are not allowed to be used in voting is because these shares are owned by the corporation and should benefit all the stockholders collectively, not only the controlling directors who could determine how the treasury shares could be voted, if allowed. — Jose Rodel Clapano