6. cemco holding v national life

7/25/2019 6. CEMCO Holding v National Life

1/24

THIRD DIVISION

CEMCO HOLDINGS, INC.,

Petitioner,

-versus -

NATIONAL LIFE INSURANCE

COMPANY OF THE

PHILIPPINES, INC.,

Respondent.

G.R. No. 171815

Present:

YNARES-SANTIAGO,J.,

Chairperson,

ASTRIA-!ARTINE",

CHICO-NA"ARIO, and

NACHRA,JJ.

Pro#$%&ated:

A$&$st ', ())'

*- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -*


2/24

D E C I S I O N

CHICO-NA"ARIO,J.:

This Petition +or Reie $nder R$%e / o+ the R$%es o+ Co$rt see0s to

reerse and set aside the ( O1to2er ())/ De1ision3435 and the 6 !ar1h ())6

Reso%$tion(4(5 o+ the Co$rt o+ Appea%s in CA-G.R. SP No. 77'/7 hi1h a++ir#ed

the 8$dent9495 dated 3 e2r$ar; ())/ o+ the Se1$rities and E*1han&e

Co##ission $isition o+ petitioner Ce#1o Ho%din&s, In1.


3/24

nion Ce#ent Corporation


4/24

Tota% sto10s o+ Ce#1o in CHC 6)

Per1enta&e o+ CHC onership in CC 6)

Indire1t onership o+ Ce#1o in CC 96

Dire1t onership o+ Ce#1o in CC 3'

Tota% onership o+ Ce#1o in CC /9

As a 1onse>$en1e o+ this dis1%os$re, the PSE, in a %etter to the SEC dated 3/

B$%; ()), in>$ired as to hether the Tender O++er R$%e $nder R$%e 3@ o+ the

I#p%e#entin& R$%es o+ the Se1$rities Re&$%ation Code is not app%i1a2%e to the

p$r1hase 2; petitioner o+ the #a8orit; o+ shares o+ CC.

In a %etter dated 36 B$%; ()), Dire1tor B$stina Ca%%an&an o+ the SECs

Corporate inan1e Depart#ent responded to the >$er; o+ the PSE that hi%e it as

the stan1e o+ the depart#ent that the tender o++er r$%e as not app%i1a2%e, the

#atter #$st sti%% hae to 2e 1on+ir#ed 2; the SEC en banc.

Therea+ter, in a s$2se>$ent %etter dated (' B$%; ()), Dire1tor Ca%%an&an

1on+ir#ed that the SEC en banchad reso%ed that the Ce#1o transa1tion as not

1oered 2; the tender o++er r$%e.


5/24

On (7 B$%; ()), +ee%in& a&&rieed 2; the transa1tion, respondent Nationa%

i+e Ins$ran1e Co#pan; o+ the Phi%ippines, In1., a #inorit; sto10ho%der o+ CC,

sent a %etter to Ce#1o de#andin& the %atter to 1o#p%; ith the r$%e on #andator;

tender o++er. Ce#1o, hoeer, re+$sed.

On / A$&$st ()), a Share P$r1hase A&ree#ent as e*e1$ted 2; ACC and

?CI, as se%%ers, and Ce#1o, as 2$;er.

On 3( A$&$st ()), the transa1tion as 1ons$##ated and 1%osed.

On 3@ A$&$st ()), respondent Nationa% i+e Ins$ran1e Co#pan; o+ the

Phi%ippines, In1. +i%ed a 1o#p%aint ith the SEC as0in& it to reerse its (' B$%;

()) Reso%$tion and to de1%are the p$r1hase a&ree#ent o+ Ce#1o oid and pra;in&

that the #andator; tender o++er r$%e 2e app%ied to its CC shares. I#p%eaded in the

1o#p%aint ere Ce#1o, CC, CHC, ?CI and ACC, hi1h ere then re>$ired 2;

the SEC to +i%e their respe1tie 1o##ent on the 1o#p%aint. In their 1o##ents, the;

ere $ni+or# in ar&$in& that the tender o++er r$%e app%ied on%; to a dire1t

a1>$isition o+ the shares o+ the %isted 1o#pan; and did not e*tend to an indire1t

a1>$isition arisin& +ro# the p$r1hase o+ the shares o+ a ho%din& 1o#pan; o+ the

%isted +ir#.


6/24

In a De1ision dated 3 e2r$ar; ())/, the SEC r$%ed in +aor o+ the

respondent 2; reersin& and settin& aside its (' B$%; ()) Reso%$tion and dire1ted

petitioner Ce#1o to #a0e a tender o++er +or CC shares to respondent and other

ho%ders o+ CC shares si#i%ar to the 1%ass he%d 2; CHC in a11ordan1e ith

Se1tion @$ire Ce#1o to #a0e a tender o++er +or CC shares, and ar&$in& that the tendero++er r$%e does not app%;, or that the SECs re-interpretation o+ the r$%e 1o$%d not 2e

#ade to retroa1tie%; app%; to Ce#1os p$r1hase o+ CHC shares.

The Co$rt o+ Appea%s rendered a de1ision a++ir#in& the r$%in& o+ the SEC. It

r$%ed that the SEC has 8$risdi1tion to render the >$estioned de1ision and, in an;

eent, Ce#1o as 2arred 2; estoppe% +ro# >$estionin& the SECs 8$risdi1tion. It,

%i0eise, he%d that the tender o++er re>$ire#ent $nder the Se1$rities Re&$%ation

Code and its I#p%e#entin& R$%es app%ies to Ce#1os p$r1hase o+ CHC sto10s.

The de1reta% portion o+ the said De1ision reads:

IN VIE O THE OREGOING, the assai%ed de1ision o+ the SEC is

AIR!ED, and the pre%i#inar; in8$n1tion iss$ed 2; the Co$rt ITED./4/5

,[,]Id. at ('.


7/24

Ce#1o +i%ed a #otion +or re1onsideration hi1h as denied 2; the Co$rt o+

Appea%s.

Hen1e, the instant petition.

In its #e#orand$#, petitioner Ce#1o raises the +o%%oin& iss$es:

I.

ASS!ING ARGENDO THAT THE SEC HAS BRISDICTION OVER

NATIONA IES CO!PAINT AND THAT THE SECS RE-INTERPRETATION O THE TENDER OER RE IS CORRECT,

HETHER OR NOT THAT REINTERPRETATION CAN ?E APPIED

RETROACTIVEY TO CE!COS PREBDICE.

II.

HETHER OR NOT THE SEC HAS BRISDICTION TO ADBDICATE THEDISPTE ?ETEEN THE PARTIES A FO OR TO RENDER BDG!ENT

REFIRING CE!CO TO !AE A TENDER OER OR CC SHARES.

III.

HETHER OR NOT CE!COS PRCHASE O CHC SHARES IS S?BECTTO THE TENDER OER REFIRE!ENT.

IV.

HETHER OR NOT THE SEC DECISION, AS AIR!ED ?Y THE CA

DECISION, IS AN INCO!PETE BDG!ENT HICH PRODCED NOEECT.6465

&[&]Id. at ,(&-,('.


8/24

Si#p%; stated, the +o%%oin& are the iss$es:

3. hether or not the SEC has 8$risdi1tion oer respondents 1o#p%aint andto re>$ire Ce#1o to #a0e a tender o++er +or respondents CC shares.

(. hether or not the r$%e on #andator; tender o++er app%ies to the indire1t

a1>$isition o+ shares in a %isted 1o#pan;, in this 1ase, the indire1ta1>$isition 2; Ce#1o o+ 96 o+ CC, a p$2%i1%;-%isted 1o#pan;, thro$&h

its p$r1hase o+ the shares in CHC, a non-%isted 1o#pan;.

9. hether or not the >$estioned r$%in& o+ the SEC 1an 2e app%iedretroa1tie%; to Ce#1os transa1tion hi1h as 1ons$##ated $nder the

a$thorit; o+ the SECs prior reso%$tion.

On the +irst iss$e, petitioner Ce#1o 1ontends that hi%e the SEC 1an ta0e

1o&nian1e o+ respondents 1o#p%aint on the a%%e&ed io%ation 2; petitioner Ce#1o

o+ the #andator; tender o++er re>$ire#ent $nder Se1tion 3@ o+ Rep$2%i1 A1t No.

7'@@, the sa#e stat$te does not est the SEC ith 8$risdi1tion to ad8$di1ate and

deter#ine the ri&hts and o2%i&ations o+ the parties sin1e, $nder the sa#e stat$te, the

SECs a$thorit; is p$re%; ad#inistratie. Hain& 2een ested ith p$re%;

ad#inistratie a$thorit;, the SEC 1an on%; i#pose ad#inistratie san1tions s$1h as

the i#position o+ ad#inistratie +ines, the s$spension or reo1ation o+ re&istrations

ith the SEC, and the %i0e. Petitioner stresses that there is nothin& in the stat$te

hi1h a$thories the SEC to iss$e orders &rantin& a++ir#atie re%ie+s. Sin1e the

SECs order 1o##andin& it to #a0e a tender o++er is an a++ir#atie re%ie+ +i*in& the

respe1tie ri&hts and o2%i&ations o+ parties, s$1h order is oid.


9/24

Petitioner +$rther 1ontends that in the a2sen1e o+ an; spe1i+i1 &rant o+

8$risdi1tion 2; Con&ress, the SEC 1annot, 2; #ere ad#inistratie re&$%ation,

1on+er on itse%+ that 8$risdi1tion.

Petitioners stan1e +ai%s to pers$ade.

In ta0in& 1o&nian1e o+ respondents 1o#p%aint a&ainst petitioner and

eent$a%%; renderin& a 8$dent hi1h ordered the %atter to #a0e a tender o++er,

the SEC as a1tin& p$rs$ant to R$%e 3@$it;shares o+ a p$2%i1 1o#pan; at thresho%d a#o$nts itho$t the re>$ired tender

o++er, the Co##ission, $pon 1o#p%aint, #a; n$%%i+; the said a1>$isition and dire1t

the ho%din& o+ a tender o++er. This sha%% 2e itho$t pre8$di1e to the i#position o+other san1tions $nder the Code.

The +ore&oin& r$%e e#anates +ro# the SECs poer and a$thorit; to re&$%ate,

inesti&ate or s$perise the a1tiities o+ persons to ens$re 1o#p%ian1e ith the

Se1$rities Re&$%ation Code, #ore spe1i+i1a%%; the proision on #andator; tender

o++er $nder Se1tion 3@ thereo+.'4'5

' 4'5Se1tion /, S$2se1tion /.3.


10/24

Another proision o+ the stat$te, hi1h proides the 2asis o+ R$%e 3@


11/24

inesti&ate 1o#p%aints o+ io%ations o+ the tender o++er r$%e, 2$t to ad8$di1ate

1ertain ri&hts and o2%i&ations o+ the 1ontendin& parties and &rant appropriate

re%ie+s in the e*er1ise o+ its re&$%ator; +$n1tions $nder the SRC. Se1tion /.3 o+ theSRC a%%os a &enera% &rant o+ ad8$di1atie poers to the SEC hi1h #a; 2e

i#p%ied +ro# or are ne1essar; or in1identa% to the 1arr;in& o$t o+ its e*press

poers to a1hiee the o28e1ties and p$rposes o+ the SRC. e #$st 2ear in #indin interpretin& the poers and +$n1tions o+ the SEC that the %a has #ade the

SEC pri#ari%; a re&$%ator; 2od; ith the in1identa% poer to 1ond$1t

ad#inistratie hearin&s and #a0e de1isions. A re&$%ator; 2od; %i0e the SEC #a;1ond$1t hearin&s in the e*er1ise o+ its re&$%ator; poers, and i+ the 1ase ino%es

io%ations or 1on+%i1ts in 1onne1tion ith the per+or#an1e o+ its re&$%ator;

+$n1tions, it i%% hae the d$t; and a$thorit; to reso%e the disp$te +or the 2est

interests o+ the p$2%i1.7475

or s$re, the SEC has the a$thorit; to pro#$%&ate r$%es and re&$%ations,s$28e1t to the %i#itation that the sa#e are 1onsistent ith the de1%ared po%i1; o+ the

Code. A#on& the# is the prote1tion o+ the inestors and the #ini#iation, i+ not

tota% e%i#ination, o+ +ra$d$%ent and #anip$%atie deises. Th$s, S$2se1tion /.3


12/24

'(.(. The Co##ission sha%% pro#$%&ate r$%es and re&$%ations proidin&

+or reportin&, dis1%os$re and the preention o+ +ra$d$%ent, de1eptie or

#anip$%atie pra1ti1es in 1onne1tion ith the p$r1hase 2; an iss$er, 2; tendero++er or otherise, o+ and e>$it; se1$rit; o+ a 1%ass iss$ed 2; it that satis+ies the

re>$ire#ents o+ S$2se1tion 3'.(. S$1h r$%es and re&$%ations #a; re>$ire s$1h

iss$er to proide ho%ders o+ e>$it; se1$rities o+ s$1h dates ith s$1h in+or#ationre%atin& to the reasons +or s$1h p$r1hase, the so$r1e o+ +$nds, the n$#2er o+

shares to 2e p$r1hased, the pri1e to 2e paid +or s$1h se1$rities, the #ethod o+

p$r1hase and s$1h additiona% in+or#ation as the Co##ission dee#s ne1essar; orappropriate in the p$2%i1 interest or +or the prote1tion o+ inestors, or hi1h the

Co##ission dee#s to 2e #ateria% to a deter#ination 2; ho%ders hether s$1h

se1$rit; sho$%d 2e so%d.

The poer 1on+erred $pon the SEC to pro#$%&ate r$%es and re&$%ations is a

%e&is%atie re1o&nition o+ the 1o#p%e*it; and the 1onstant%;-+%$1t$atin& nat$re o+

the #ar0et and the i#possi2i%it; o+ +oreseein& a%% the possi2%e 1ontin&en1ies that

1annot 2e addressed in adan1e. As en$n1iated in Victorias Milling Co., Inc. v.

Social Security Commission94@5:

R$%es and re&$%ations hen pro#$%&ated in p$rs$an1e o+ the pro1ed$re ora$thorit; 1on+erred $pon the ad#inistratie a&en1; 2; %a, parta0e o+ the nat$re

o+ a stat$te, and 1o#p%ian1e thereith #a; 2e en+or1ed 2; a pena% san1tionproided in the %a. This is so 2e1a$se stat$tes are $s$a%%; 1o$1hed in &enera%

ter#s, a+ter e*pressin& the po%i1;, p$rposes, o28e1ties, re#edies and san1tions

intended 2; the %e&is%at$re. The detai%s and the #anner o+ 1arr;in& o$t the %a areo+ten ti#es %e+t to the ad#inistratie a&en1; entr$sted ith its en+or1e#ent. In

this sense, it has 2een said that r$%es and re&$%ations are the prod$1t o+ a de%e&ated

poer to 1reate ne or additiona% %e&a% proisions that hae the e++e1t o+ %a.

!oreoer, petitioner is 2arred +ro# >$estionin& the 8$risdi1tion o+ the SEC.

It #$st 2e pointed o$t that petitioner had parti1ipated in a%% the pro1eedin&s 2e+ore

the SEC and had pra;ed +or a++ir#atie re%ie+. In +a1t, petitioner de+ended the

)[)]11 Phi. ,,,$ ,,' 1)&*/.


13/24

8$risdi1tion o+ the SEC in its Co##ent dated 3/ Septe#2er ()), +i%ed ith the

SEC herein it asserted:

This Honora2%e Co##ission is a hi&h%; spe1ia%ied 2od; 1reated +or thep$rpose o+ ad#inisterin&, oerseein&, and #ana&in& the 1orporate ind$str;, share

inest#ent and se1$rities #ar0et in the Phi%ippines. ?; the er; nat$re o+ its

+$n1tions, it dedi1ated to the st$d; and ad#inistration o+ the 1orporate and

se1$rities %as and has ne1essari%; dee%oped an e*pertise on the s$28e1t. ?asedon said +$n1tions, the Honora2%e Co##ission is ne1essari%; tas0ed to iss$e

r$%in&s ith respe1t to #atters ino%in& 1orporate #atters and share a1>$isitions.

Veri%; hen this Honora2%e Co##ission rendered the R$%in& that the a1>$isitiono+ Ce#1o Ho%din&s o+ the #a8orit; shares o+ nion Ce#ent Ho%din&s, In1., a

s$2stantia% sto10ho%der o+ a %isted 1o#pan;, nion Ce#ent Corporation, is not1oered 2; the #andator; tender o++er re>$ire#ent o+ the SRC R$%e 3@, it ase%% ithin its poers and e*pertise to do so. S$1h r$%in& sha%% 2e respe1ted,

$n%ess there has 2een an a2$se or i#proident e*er1ise o+ a$thorit;.3)43)5

Petitioner did not >$estion the 8$risdi1tion o+ the SEC hen it rendered an

opinion +aora2%e to it, s$1h as the (' B$%; ()) Reso%$tion, here the SEC opined

that the Ce#1o transa1tion as not 1oered 2; the #andator; tender o++er r$%e. It

as on%; hen the 1ase as 2e+ore the Co$rt o+ Appea%s and a+ter the SEC

rendered an $n+aora2%e 8$dent a&ainst it that petitioner 1ha%%en&ed the SECs

1o#peten1e. As arti1$%ated in Ceroferr Realty Corporation v. Court of

Appeals[11]:

hi%e the %a10 o+ 8$risdi1tion o+ a 1o$rt #a; 2e raised at an; sta&e o+ an

a1tion, neerthe%ess, the part; raisin& s$1h >$estion #a; 2e estopped i+ he has

a1tie%; ta0en part in the er; pro1eedin&s hi1h he >$estions and he on%; o28e1ts

10[10]Rollo$ %%. 1'*-1'+.

11[11]*& Phi. ,**$ ,+0 *00*/.


14/24

to the 1o$rts 8$risdi1tion 2e1a$se the 8$dent or the order s$2se>$ent%; rendered

is aderse to hi#.

On the se1ond iss$e, petitioner asserts that the #andator; tender o++er r$%eapp%ies on%; to dire1t a1>$isition o+ shares in the p$2%i1 1o#pan;.

This 1ontention is not #eritorio$s.

Tender o++er is a p$2%i1%; anno$n1ed intention 2; a person a1tin& a%one or in

1on1ert ith other persons to a1>$ire e>$it; se1$rities o+ a p$2%i1 1o#pan;.3(43(5 A

p$2%i1 1o#pan; is de+ined as a 1orporation hi1h is %isted on an e*1han&e, or a

1orporation ith assets e*1eedin& P/),))),))).)) and ith ()) or #ore

sto10ho%ders, at %east ()) o+ the# ho%din& not %ess than 3)) shares o+ s$1h

1o#pan;.394395 Stated di++erent%;, a tender o++er is an o++er 2; the a1>$irin& person

to sto10ho%ders o+ a p$2%i1 1o#pan; +or the# to tender their shares therein on the

ter#s spe1i+ied in the o++er.3435 Tender o++er is in p%a1e to prote1t #inorit;

shareho%ders a&ainst an; s1he#e that di%$tes the share a%$e o+ their inest#ents. It

&ies the #inorit; shareho%ders the 1han1e to e*it the 1o#pan; $nder reasona2%e

1*[1*]"he Phii%%ine Securities Re#uation ode Annotated/$ Ra2ae A. Moraes

*00, 3d./$ %. 1,+.

1+[1+]Id.

1[1]Id.


15/24

ter#s, &iin& the# the opport$nit; to se%% their shares at the sa#e pri1e as those o+

the #a8orit; shareho%ders.3/43/5

nder Se1tion 3@ o+ Rep$2%i1 A1t No. 7'@@, it is stated:

!en"er #ffers. [email protected]. $ire at %east +i+teen per1ent $it;se1$rit; o+ a %isted 1orporation or o+ an; 1%ass o+ an; e>$it; se1$rit; o+ a

1orporation ith assets o+ at %east i+t; #i%%ion pesos


16/24

is +$rther proided therein that #andator; tender o++er is sti%% app%i1a2%e een i+ the

a1>$isition is %ess than 9/ hen the p$r1hase o$%d res$%t in onership o+ oer

/3 o+ the tota% o$tstandin& e>$it; se1$rities o+ the p$2%i1 1o#pan;.3'43'5

The SEC and the Co$rt o+ Appea%s r$%ed that the indire1t a1>$isition 2;

petitioner o+ 96 o+ CC shares thro$&h the a1>$isition o+ the non-%isted CHC

shares is 1oered 2; the #andator; tender o++er r$%e.

This interpretation &ien 2; the SEC and the Co$rt o+ Appea%s #$st 2e

s$stained.

In the eent that the tender o++er is oers$2s1ri2ed, the a&&re&ate a#o$nt o+ se1$rities

to 2e a1>$ired at the 1%ose o+ s$1h tender o++er sha%% 2e proportionate%; distri2$ted

a1ross 2oth se%%in& shareho%der ith ho# the a1>$irer #a; hae 2een in priate

ne&otiations and #inorit; shareho%ders.

?. An; person or &ro$p o+ persons a1tin& in 1on1ert, ho intends to a1>$ire thirt;-+ie

per1ent $it; shares in a p$2%i1 1o#pan; in one or #ore

transa1tions ithin a period o+ te%e $ired to #a0e a tender

o++er to a%% ho%ders o+ s$1h 1%ass +or the n$#2er o+ shares so a1>$ired ithin the said

period.

C. I+ an; a1>$isition o+ een %ess than thirt;-+ie per1ent $irer sha%% 2e re>$ired to #a0e a tender o++er $nder this

R$%e +or a%% the o$tstandin& e>$it; se1$rities to a%% re#ainin& sto10ho%ders o+ the said

1o#pan; at a pri1e s$pported 2; a +airness opinion proided 2; an independent

+inan1ia% adisor or e>$ia%ent third part;. The a1>$irer in s$1h a tender o++er sha%% 2e

re>$ired to a11ept an; and a%% se1$rities th$s tendered.

1([1(]Id.


17/24

The r$%e in this 8$risdi1tion is that the 1onstr$1tion &ien to a stat$te 2; an

ad#inistratie a&en1; 1har&ed ith the interpretation and app%i1ation o+ that stat$te

is entit%ed to &reat ei&ht 2; the 1o$rts, $n%ess s$1h 1onstr$1tion is 1%ear%; shon

to 2e in sharp 1ontrast ith the &oernin& %a or stat$te.374375 The rationa%e +or this

r$%e re%ates not on%; to the e#er&en1e o+ the #$%ti+ario$s needs o+ a #odern or

#oderniin& so1iet; and the esta2%ish#ent o+ dierse ad#inistratie a&en1ies +or

addressin& and satis+;in& those needs it a%so re%ates to a11$#$%ation o+ e*perien1e

and &roth o+ spe1ia%ied 1apa2i%ities 2; the ad#inistratie a&en1; 1har&ed ith

i#p%e#entin& a parti1$%ar stat$te.3@43@5

The SEC and the Co$rt o+ Appea%s a11$rate%; pointed o$t that the 1oera&e

o+ the #andator; tender o++er r$%e 1oers not on%; dire1t a1>$isition 2$t a%so

indire1t a1>$isition or an; t;pe o+ a1>$isition. This is 1%ear +ro# the dis1$ssions o+

the ?i1a#era% Con+eren1e Co##ittee on the Se1$rities A1t o+ ())), on 3' B$%;

())).

SEN. S. OS!EA. Eto an& #an&;a;ari di;an, eh. So#e2od; 1ontro%s 6'

o+ the Co#pan;. O+ 1o$rse, he i%% pa; a pre#i$# +or the +irst 6'. Contro% ;an,

eh. Eh, 0aaa ;$n& #&a #aiian, an& 99 2e1a$se the a%$e o+ the sto10#ar0et 1o$%d &o don, 1o$%d &o don a+ter that, 2e1a$se there i%%


18/24

(). aaa na#an ;$n& na0ahaa0 n&a;on n& (). An& 2a2a n& share sa

#ar0et. ?$t e did not hae a %a prote1tin& the# at that ti#e.

CHAIR!AN ROCO. So hat is it that ;o$ ant to a1hiee

SEN. S. OS!EA. That i+ a 1ertain &ro$p a1hiees a 1ertain a#o$nt o+

onership in a 1orporation, ;eah, he is o2%i&ated to 2$; an;2od; ho ants tose%%.

CHAIR!AN ROCO. Pro-rata %an&. $ire the shares in CC and the in1identa% 2ene+it o+ hain& a1>$ired the 1ontro%

o+ the said p$2%i1 1o#pan; #$st not 2e ta0en a&ainst it.

These ar&$#ents are not 1onin1in&. The %e&is%atie intent o+ Se1tion 3@ o+

the Code is to re&$%ate a1tiities re%atin& to a1>$isition o+ 1ontro% o+ the %isted

1o#pan; and +or the p$rpose o+ prote1tin& the #inorit; sto10ho%ders o+ a %isted

1orporation. hateer #a; 2e the #ethod 2; hi1h 1ontro% o+ a p$2%i1 1o#pan; is

o2tained, either thro$&h the dire1t p$r1hase o+ its sto10s or thro$&h an indire1t

#eans, #andator; tender o++er app%ies. As appropriate%; he%d 2; the Co$rt o+

Appea%s:

*0[*0]Rollo$ %%. *,&-*,(.


19/24

The petitioner posits that hat it a1>$ired ere sto10s o+ CHC and not CC. ?;happenstan1e, as a res$%t o+ the transa1tion, it 2e1a#e an indire1t oner o+ CC.

e are 1onstrained, hoeer, to 1onstr$e onership a1>$isition to #ean 2oth

dire1t and indire1t. hat is de1isie is the deter#ination o+ the poer o+ 1ontro%.The %e&is%atie intent 2ehind the tender o++er r$%e #a0es 1%ear that the t;pe o+

a1tiit; intended to 2e re&$%ated is the a1>$isition o+ 1ontro% o+ the %isted 1o#pan;

thro$&h the p$r1hase o+ shares. Contro% #a; 42e5 e++e1ted thro$&h a dire1t and

indire1t a1>$isition o+ sto10, and hen this ta0es p%a1e, irrespe1tie o+ the #eans,a tender o++er #$st o11$r. The 2otto#%ine o+ the %a is to &ie the shareho%der o+

the %isted 1o#pan; the opport$nit; to de1ide hether or not to se%% in 1onne1tion

ith a trans+er o+ 1ontro%. * * *.(34(35

As to the third iss$e, petitioner stresses that the r$%in& on #andator; tender

o++er r$%e 2; the SEC and the Co$rt o+ Appea%s sho$%d not hae retroa1tie e++e1t

or 2e #ade to app%; to its p$r1hase o+ the CHC shares as it re%ied in &ood +aith on

the %etter dated (' B$%; ()) o+ the SEC hi1h opined that the proposed

a1>$isition o+ the CHC shares as not 1oered 2; the #andator; o++er r$%e.

The ar&$#ent is not pers$asie.

The a1tion o+ the SEC on the PSE re>$est +or opinion on the Ce#1o

transa1tion 1annot 2e 1onstr$ed as passin& #erits or &iin& approa% to the

>$estioned transa1tion. As apt%; pointed o$t 2; the respondent, the %etter dated ('

B$%; ()) o+ the SEC as nothin& 2$t an approa% o+ the dra+t %etter prepared 2;

Dire1tor Ca%%an&a. There as no p$2%i1 hearin& here interested parties 1o$%d hae

2een heard. Hen1e, it as not iss$ed $pon a de+inite and 1on1rete 1ontroers;

*1[*1]Id. at (&-((.


20/24

a++e1tin& the %e&a% re%ations o+ parties there2; #a0in& it a 8$dent 1on1%$sie on

a%% the parties. Said %etter as #ere%; adisor;. B$rispr$den1e has it that an

adisor; opinion o+ an a&en1; #a; 2e stri10en don i+ it deiates +ro# the

proision o+ the stat$te.((4((5 Sin1e the %etter dated (' B$%; ()) r$ns 1o$nter to

the Se1$rities Re&$%ation Code, the sa#e #a; 2e disre&arded as hat the SEC has

done in its de1ision dated 3 e2r$ar; ())/.

Ass$#in& arguen"othat the %etter dated (' B$%; ()) 1onstit$tes a r$%in&,

the sa#e 1annot 2e $ti%ied to deter#ine the ri&hts o+ the parties. hat is to 2eapp%ied in the present 1ase is the s$2se>$ent r$%in& o+ the SEC dated 3 e2r$ar;

())/ a2andonin& the opinion e#2odied in the %etter dated (' B$%; ()). In Serrano

v. $ational %abor Relations Commission,(94(95 an ar&$#ent as raised si#i%ar to

the 1ase $nder 1onsideration. Priate respondent therein ar&$ed that the ne

do1trine prono$n1ed 2; the Co$rt sho$%d on%; 2e app%ied prospe1tie%;. Said

post$%ation as i&nored 2; the Co$rt hen it r$%ed:

hi%e a 8$di1ia% interpretation 2e1o#es a part o+ the %a as o+ the date that

%a as ori&ina%%; passed, this is s$28e1t to the >$a%i+i1ation that hen a do1trine

o+ this Co$rt is oerr$%ed and a di++erent ie is adopted, and #ore so hen thereis a reersa% thereo+, the ne do1trine sho$%d 2e app%ied prospe1tie%; and sho$%d

not app%; to parties ho re%ied on the o%d do1trine and a1ted in &ood +aith. To ho%d

otherise o$%d 2e to deprie the %a o+ its >$a%it; o+ +airness and 8$sti1e then, i+

there is no re1o&nition o+ hat had transpired prior to s$1h ad8$di1ation.

**[**]San Juan de Dios Hospital Emploees Association!A"# v. National $a%or

Relations Commission$ +& Phi. 100+$ 1010 1))(/.

*+[*+]+'( Phi. +,$ +,( *000/.


21/24

It is apparent that priate respondent #is1on1eied the i#port o+ the

r$%in&. The de1ision in Co%$#2ia Pi1t$res does not #ean that i+ a ne r$%e is %aid

don in a 1ase, it sho$%d not 2e app%ied in that 1ase 2$t that said r$%e sho$%d app%;prospe1tie%; to 1ases arisin& a+terards. Priate respondents ie o+ the

prin1ip%e o+ prospe1tie app%i1ation o+ ne 8$di1ia% do1trines o$%d t$rn the

8$di1ia% +$n1tion into a #ere a1ade#i1 e*er1ise ith the res$%t that the do1trine%aid don o$%d 2e no #ore than a di1t$# and o$%d deprie the ho%din& in the

1ase o+ an; +or1e.

Indeed, hen the Co$rt +or#$%ated the enphi% do1trine, hi1h e

reersed in this 1ase, the Co$rt did not de+er app%i1ation o+ the r$%e %aid don

i#posin& a +ine on the e#p%o;er +or +ai%$re to &ie noti1e in a 1ase o+ dis#issa%

+or 1a$se. To the 1ontrar;, the ne r$%e as app%ied ri&ht then and there. * * *.

ast%;, petitioner a%%e&es that the de1ision o+ the SEC dated 3 e2r$ar;())/ is in1o#p%ete and prod$1es no e++e1t.

This 1ontention is 2ase%ess.

The de1reta% portion o+ the SEC de1ision states:

In ie o+ the +ore&oin&, the %etter o+ the Co##ission, si&ned 2; Dire1tor

B$stina . Ca%%an&an, dated B$%; (', ()), addressed to the Phi%ippine Sto10E*1han&e is here2; REVERSED and SET ASIDE. Respondent Ce#1o is here2;

dire1ted to #a0e a tender o++er +or CC shares to 1o#p%ainant and other ho%ders

o+ CC shares si#i%ar to the 1%ass he%d 2; respondent CHC, at the hi&hest pri1eit paid +or the 2ene+i1ia% onership in respondent CC, stri1t%; in a11ordan1e

ith SRC R$%e 3@, Se1tion @


22/24

A readin& o+ the a2oe r$%in& o+ the SEC reea%s that the sa#e is 1o#p%ete.

It orders the 1ond$1t o+ a #andator; tender o++er p$rs$ant to the pro1ed$re

proided +or $nder R$%e 3@


23/24

CONSUELO YNARES/SANTIAGO

Asso1iate B$sti1e

Chairperson

MA. ALICIA AUSTRIA/MARTINE2

Asso1iate B$sti1e

ANTONIO EDUARDO 3. NACHURA

Asso1iate B$sti1e

ATTESTATION

I attest that the 1on1%$sions in the a2oe De1ision ere rea1hed in

1ons$%tation 2e+ore the 1ase as assi&ned to the riter o+ the opinion o+ the Co$rts

Diision.


24/24

CONSUELO YNARES/SANTIAGO

Asso1iate B$sti1e

Chairperson, Third Diision

CERTIFICATION

P$rs$ant to Se1tion 39, Arti1%e VIII o+ the Constit$tion, and the Diision

Chairpersons Attestation, it is here2; 1erti+ied that the 1on1%$sions in the a2oe

De1ision ere rea1hed in 1ons$%tation 2e+ore the 1ase as assi&ned to the riter o+

the opinion o+ the Co$rts Diision.

REYNATO S. PUNO

Chie+ B$sti1e

6. cemco holding v national life

Documents