Meralco-GSIS case wasn't 1st SEC decision of Roxas

STINKING STABLES: I was not surprised that Court of Appeals Justice Vicente Q. Roxas was sacked by the Supreme Court after having figured in a scandalous show of undue interest in a high-profile case that has tainted the entire judiciary.

Had Roxas been removed from the bench earlier, the public may have been spared this spectacle of “hoodlums in robe” quarreling over a case that many lawyers say could fetch a hustler judge enough millions to retire in style.

Something must have gone wrong in the Augean stables, and the stinking mess at the CA was just too much. Roxas did not retire in style, but was removed in shame last Tuesday.

This high-flying bar topnotcher from the University of the Philippines and the Georgetown University Law Center had it coming.

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PHC MIGRANTS: Way back in 2006, Roxas could have been rapped for good reason. He could at least have been reined in by the Supreme Court in a case involving – as in the Manila Electric Co. (Meralco) case – the calling of a stockholders’ meeting. But he was not.

The case in 2006 involved the Philcomsat Holdings Corp. (PHC) that had fallen into the hands of government nominees in the Philippine Communications Satellite Corp. (Philcomsat), the mother firm, who had migrated to PHC to control it despite their appointments having been withdrawn by President Gloria Arroyo.

Because of the failure of PHC to hold stockholders’ meetings to elect new directors, the Securities and Exchange Commission ordered the calling for election-meetings.

But suspended lawyer Luis Lokin Jr. and Alma Kristina Alobba, purportedly representing PHC President Manuel Nieto Jr., ran to the CA to stop the SEC from enforcing its order.

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NIETO USED: Poor Nieto said he was unaware of the contents of Lokin’s petition and did not recognize the representation of Lokin and Alobba on the matter. Still, Roxas overturned the SEC directive by issuing his almighty Temporary Restraining Order.

Realizing what was going on, Nieto entered into an agreement with other shareholders, Katrina Ponce-Enrile and Erlinda Bildner, and asked the SEC to order a PHC stockholders' meeting.

He also told Roxas that he was withdrawing his supposed TRO petition, that he no longer objects to a stockholders’ meeting and the election of new directors. He said he just wanted to benefit the corporation and its legitimate stockholders.

Surprisingly, Roxas did not allow Nieto to withdraw. Even without a petitioner, he granted the withdrawn petition and permanently enjoined the SEC from calling PHC stockholders’ meetings!

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P800-M LOST: Roxas could not have been unaware that PHC is a publicly listed corporation with some 2,500 stockholders, including the government.

By his ruling, Roxas actually favored – against legitimate stockholders – a small group of non-shareholders claiming to be directors and who have been accused of draining PHC assets with impunity.

As a result of the Roxas injunction, PHC shareholders – including the government – have lost some P800 million resulting from poor decisions and suspicious disbursements.

Of the P800 million, the old directors clinging on with the help of the courts and the SEC placed P450 million in money market deposits in the failing Bankwise. After the Bangko Sentral closed Bankwise on Feb. 7, 2008, the likelihood of ever recovering the money dimmed.

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EXTRA-LEGAL FUNDS: Some P50 million in corporate funds were transferred to a joint account with Nieto and a “PHC c/o Cesar Munsayac,” which two overstaying directors withdrew later. “Munsayac” is reportedly a runner of one of the directors.

Unsatisfied, a duo set up Telecommunications Center Inc. that purportedly received millions in advances from PHC. But TCI never received the funds, which presumably vanished into the pockets of non-shareholders claiming to be directors.

Bildner said that Philip Brodett, a director who is not a shareholder, was the biggest beneficiary of the Roxas injunction. Although he is an employee who declares only a P165,000 monthly income, he was reportedly able to deposit some P600 million in his personal accounts and that of a woman and her children.

Some PHC funds could no longer be traced, Bildner said, such as the P82 million supposedly spent for lawyers and, from what is recorded in the books, as representation expenses for the Supreme Court, the Sandiganbayan, the PCGG and the SEC!

Whether the money for these extra-legal expenses reached the courts and government agencies or was waylaid is now being investigated by the Supreme Court and the Sandiganbayan.

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BROD HELPED?: Roxas’ refusal to allow stockholders to elect new directors is injurious to the interest of minority shareholders and the legitimate government nominees Daniel Gutierrez, Ramon Jacinto, Abraham Abesamis and Rodolfo Serrano Jr.

Accusing Roxas of being partial to the relieved government nominees, Bildner filed an administrative complaint with the Supreme Court against the CA justice.

On June 12, 2008, the Supreme Court ruled in favor of Roxas. While not citing any precedent supporting his action, the SC held that allowing Nieto to withdraw his petition was at Roxas’ discretion.

It is curious that the decision was penned by Roxas’ fraternity brother in the High Court. The same fraternal justice reportedly voted for only a six-month suspension for Roxas, who was eventually ordered dismissed outright and barred from public service.

Bildner deplored that Roxas has allowed publicly listed corporations such as PHC to violate the Corporation Code that mandates the calling of annual stockholders’ meetings and election of directors.

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