The query here is whether or not the Securities and Exchange Commission (SEC) has the power to compel the officers of any registered corporation, partnership or association to call for a stockholders’ meeting. Previously, I mentioned about the procedure and steps in calling for such a meeting. Now, I will go into the substantive matter where the Court of Appeals had occasion to rule on the validity of SEC calling of stockholders’ meeting (See: Alfonso vs. Aznar III, CA. G.R. CEB-SP No. 01386).

First, it is worthy to take a glimpse into the Securities Regulation Code (R.A. 8799) which took effect on July 19, 2000 and which provides, viz: 5.2. The Commission’s jurisdiction over all cases enumerated under Section 5 of Presidential Decree 902-A is hereby transferred to the Courts of general jurisdiction or the appropriate Regional Trial Court: Provided, That the Supreme Court in the exercise of its authority may designate the Regional Trial Court (RTC) branches that shall exercise jurisdiction over these cases. The Commission shall retain jurisdiction over pending cases involving intracorporate disputes submitted for final resolution which should be resolved within one (1) year from the enactment of this Code. The Commission shall retain jurisdiction over pending suspension of payments/rehabilitation cases filed as of 30 June 2000 until finally disposed. To date, some of these are still pending before the SEC.

On the other hand, it is worthy to mention the fact that cases that were transferred from the SEC to the RTC are enumerated also in Section 5.2 of the same law such as: (1) Devices or schemes employed by, or any act of, the board of directors, business associates, officers or partners, amounting to fraud or misrepresentation which may be detrimental to the interest of the public and/or of the stockholders, partners, or members of any corporation, partnership, or association; (2) Controversies arising out of intracorporate, partnership, or association relations, between and among stockholders, members or associates; and between, any or all of them and the corporation, partnership, or association of which they are stockholders, members, or associates, respectively; (3) Controversies in the election or appointment of directors, trustees, officers, or managers of corporations, partnerships, or associations; and (4) Petitions of corporations, partnerships or associations to be declared in a state of suspension of payments.

Under Presidential Decree 902-A the Securities and Exchange Commission (SEC) has the power to compel the officers of any corporation, partnership or association registered with them, to call for Annual Stockholders’ Meeting. This is within the regulatory function of the Commission. In the case of Pereyra vs. IAC (181 SCRA 244, 1994)), the Supreme Court held that: “The jurisdiction of SEC is thus limited to matters intrinsically connected with the regulation of corporations, partnerships and associations and those dealing with internal affairs of such entities. P.D. 902-A does not confer jurisdiction to SEC over all matters affecting corporations.” As an offshoot of this doctrine, the SEC is likewise deemed to have limited authority that allows it to call the stockholders’ meeting but not necessarily to decide a controversy dealing with the election of directors and officers in or as an event of the same meeting. The election and its circumstances would be of an intra-corporate nature outside of SEC jurisdiction now under R.A. 8799 (paraphrasing Dee vs. SEC, 199 SCRA 238).

Therefore, these pieces of legislative pronouncements do not come in conflict with each other. R.A. 8799 does not transfer the power to call a stockholders’ meeting to the Regional Trial Courts because it is not among the items enumerated above and PD 902-A clearly stipulates that such power is with the SEC. PD 902-A having been the decree/law governing SEC’s regulatory activities prior to R.A. 8799, unless expressly amended or repealed, is still deemed controlling as regards the provisions not expressly amended or repealed or found in direct contradiction with the later law.

The SEC, by petition properly filed, may order the calling of a stockholders’ meeting when one is not called in compliance with the bylaws of a corporation and when reasons for such an order are meritorious.

LOPEZ-led media giant ABS-CBN Broadcasting Corp. said Central CATV will start contributing substantially to its revenue this year alongside global operations unit ABS-CBN Global.

PLDT seeks interconnection model

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THE Primer Group of Cos., distributors of world-class World Traveller luggage brand, and Gyroplane Rotorcraft Inc., local operator of gyroplanes, have entered into a partnership agreement.

CEBU Pacific (CEB) over the weekend launched its Cebu-Macau and Cebu-Bangkok direct flights, with a view to catch for the Philippines a spillover of Europeans who transit through the Asian cities.

SEMIRARA Mining Corp., a majority-owned unit of DMCI Holdings Inc., said its net profit rose to P633.3 million last year, up 5.3 percent from P601.2 million a year earlier.

The query here is whether or not the Securities and Exchange Commission (SEC) has the power to compel the officers of any registered corporation, partnership or association to call for a stockholders’ meeting.