In the 15th and 16th centuries, Spain ruled the world. It took the lead in global exploration and colonial expansion as it opened trade routes across the seas and established new territories all over, including Asia and the Americas. But as with all far-reaching empires, geopolitics made sure its demise would be only a matter of time. Thus, over the years new superpowers emerged and, nowadays, China and India are giving the European and the United States economies stiff competition.

Today Spain is still among the largest economies in the world. Its companies have also maintained their standing in global business. One Spanish firm, for instance, is now reportedly the world’s leading supplier of value-added services for mobile phones and the Internet, given its presence in over 50 countries, including the Philippines, through agreements with over 100 mobile-phone networks. It reported revenues of over $500 million in 2007. And it even bested its closest competitor, reportedly a Chinese company, not too long ago in a bid to gain control over a financially troubled UK firm listed in the London Stock Exchange.

While it seems to be doing very well worldwide, this Spanish company appears to have found itself in a bit of a legal mess on local shores, as the direct result of its takeover of that UK company. This was because prior to that takeover, the UK firm reportedly signed a contract to purchase a Philippine firm in the same line of business. The UK firm had reportedly offered to buy the RP firm through a share-swap scheme involving the UK firm’s listed shares in London—with 50 percent payment already made to the RP firm upon signing, and the remaining 50 percent payable two years after. In the interim, local shareholders retained control.

But because of its financial troubles, the UK firm had taken on a strategic investor, and it had chosen the Spaniards over the Chinese. However, given the valid sale contract, the RP firm’s consent to the strategic investment was reportedly sought. And with the Spaniard’s supposed verbal promise to honor the sale terms after their takeover, the RP firm had agreed to it. But after the takeover and shortly before it was to pay the remaining 50-percent payment due the RP firm under its sale contract, at the behest of its new Spanish owners the UK firm instead delisted from London and thus allegedly breached the terms of its original sale contract with the RP firm. Since then, the Spanish-controlled UK firm has been moving to assert its ownership of the local company.

The RP firm’s troubles first came to light sometime last year initially with rumors in business circles regarding a husband and wife who reportedly fled the country and temporarily sought refuge abroad because of alleged death threats from the woman’s former employer, apparently the RP firm. This was after the woman filed a complaint against the RP firm for allegedly anomalous business activities. The complaint was later dismissed.

While this seems to be unrelated to its troubles with the UK firm’s new owners, at this time the RP firm was already in a legal dispute with them. Further investigation by the employer also revealed that the dismissed employee and her husband allegedly used company credit cards to purchase airline tickets to Hong Kong, Shanghai, Beijing, Macau, Paris and even Madrid, and to book hotel accommodations online for their personal benefit. And this was shocking as it was scandalous. After all, the man is the grandson of a former president, and his wife the daughter of a former senator. Credit-card fraud charges were later filed against the couple.

And then, only recently, a corporate lawyer, and  a professor in Ateneo Law School at that, also ended up being charged before prosecutors for allegedly falsifying documents reportedly in favor of the Spanish-controlled UK firm. The lawyer comes from one of the country’s top law firms, and obviously just found himself in the midst of an intracorporate dispute. Unfortunately, as he did the bidding of his client, the Spanish-controlled UK firm, he reaped a charge of falsification of documents. Reportedly at the behest of his client, and in his supposed capacity as corporate secretary of the RP firm, he wrote the RP firm’s bank to request for a change in designated authorized signatories in favor of his Spanish clients. His actions, when uncovered by local shareholders, were disputed by the RP firm, thus the charge.

The latest word is that the Spanish-controlled UK firm and the RP firm, perhaps to avoid lengthy court proceedings on who should gain control of the local business, have both agreed to resolve their dispute through arbitration, and that the panel of arbiters is expected to issue its decision in the coming weeks. Arbitration is perhaps the better route to resolving this mysterious web of business-circle rumors and intrigues. For sure, both parties are looking forward to seeing the end of lawsuits in this almost year-long dispute. 

Comments to matort@yahoo.com

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In the 15th and 16th centuries, Spain ruled the world. It took the lead in global exploration and colonial expansion as it opened trade routes across the seas and established new territories all over, including Asia and the Americas.