Align PHL definition of 'capital' with global finance, says PSE

The Philippine Stock Exchange (PSE) wants the definition of "capital" aligned with global finance terminology should the Supreme Court change its June 28 ruling on foreign ownership limits in the Philippine Long Distance Telephone Company (PLDT) case. The SC ruled that foreign ownership of 64.27 percent of PLDT’s common stock constitutes “control" of the local telecommunications company and “unmistakably exceeds the allowable 40 percent limit on foreign ownership of public utilities expressly mandated in Section 11, Article XII of the 1987 Constitution." “We’re hoping that there will be a lot more logic that goes into the discussion... There is no plan B yet," Philippine Stock Exchange (PSE) president Hans Sicat said in a news briefing at the Makati offices of the PSE. Sicat reiterated that the PSE considers as “ill-advised" the June 28 high court ruling which ordered PLDT to make comply with the SC’s interpretation of the 60-40 foreign ownership rule. “It is quite dangerous for the Court, with the stroke of a pen, to define the word ‘capital’," Sicat added. The PSE president said he is also wary of “a few legalistic solutions that perhaps have no basis on global definitions of capital and debt." "Capital has many tiers," Sicat explained. SEC to SC: Let’s define ‘capital’ The Securities and Exchange Commission (SEC) has asked the high court to reconsider its ruling that defined “capital" in Philippine corporations on the basis of controlling ownership of voting stock. However, the SEC’s motion, filed through the Office of the Solicitor General last July 15, does not suggest a definition of “capital." Instead, the SEC pointed out that petitioner Wilson P. Gamboa had failed to exhaust all administrative remedies by bringing his case against PLDT straight to the Supreme Court. The SEC argued that Gamboa deprived the SEC of exercising its “primary jurisdiction" as the administrative body tasked with settling issues regarding securities and equity instruments. “Mandamus, as an extraordinary remedy, may be resorted to only in cases of extreme necessity when the ordinary forms of procedure are powerless to afford him relief," the SEC said in the motion it submitted. The high court said the opposing parties will have the chance to present their case during oral arguments. Compliance to take time The SEC said that should the June 28 SC ruling stand and become final, it will take time for companies and the SEC itself to comply with the high court’s definition of capital. SEC Secretary Gerard Lukban said in an email sent to GMA News Online, “it cannot be expected that companies would comply... prior to the issuance of the decision." “In the event that the Supreme Court ruling re-defining ‘capital’ becomes final, the Commission would have to tweak its monitoring tools... so as to include information on the type of shares and voting rights," Lukban added. — MRT/VS, GMA News