By Elijah Felice E. Rosales & Lorenz S. Marasigan
The government’s antitrust body on Wednesday reiterated its position that Globe Telecom Inc. and PLDT Inc. should not have proceeded with their acquisition of San Miguel Corp.’s (SMC) telecommunication assets, as the courts have yet to rule on the issue.
In a statement, the Philippine Competition Commission (PCC) decried Globe and PLDT’s move to carry on the third and last tranche of payment for its P69.1-billion joint purchase of SMC’s telco assets.
“The PCC stands by its position that Globe and PLDT should not have proceeded with the payment of their final installment on the telco deal, considering pending cases filed before the Supreme Court [SC] and Court of Appeals,” the statement read.
“Completing the payment for the telco assets is a move that unduly preempts the forthcoming rulings of the SC and CA,” it added.
The PCC said big-ticket deals, like multibillion-peso acquisitions, must undergo strict review by the government, given the impact it will have to public interest.
“As with any transaction required to be notified to PCC, the P69.1-billion deal needs to be reviewed through a market competition lens to safeguard consumer welfare over the long term,” the agency said.
The PCC said the deal would have been completely reviewed had Globe and PLDT submitted the required notification.
“The PCC may be fairly new and companies are still adjusting to the regulatory framework of the Philippine Competition Act, but they must strictly adhere to the law. Globe and PLDT should not be exempted,” it concluded. Globe and PLDT on Tuesday confirmed they have already completed the final tranche of the deal, defending their move as part of the contract signed with the Ramon Ang-led San Miguel.
The telcos paid the P13-billion balance to the diversified conglomerate this week. The antitrust body in April filed a petition of certiorari before the high court, seeking to lift the injunction issued by the 12th Division of the Court of Appeals with respect to the review of the transaction.
Aside from dissolving the writ of preliminary injunction issued by the appellate court, the antitrust body’s petition before the high court also sought to bar PLDT from completing the last tranche of payment to San Miguel.
The competition commission had planned to review the deal involving the coacquisition of San Miguel’s telco assets by the two largest telco players in the country.
Citing provisions of the transitory rules of the competition law, the two telcos, however, barred the antitrust body from doing so by filing separate injunction cases against the PCC.
Globe’s petition was not approved by the 6th Division of the Court of Appeals, while that of PLDT was approved. Hence, the specific request against the finally payment by the Pangilinan-led corporation. “Without any legal impediment or court order, Globe has proceeded and completed the transaction,” Globe General Counsel Froilan M. Castelo said.
He added: “Globe insists that it is in compliance of all regulatory requirements in completing the contractual obligation in the acquisition of the telco assets of San Miguel; and that Globe did not violate any rule or prevailing law at the time the transaction was signed.”
PLDT officials, on the other hand, refused to comment.
But for Castelo, PCC is also barred from commenting on the telco deal, as there exists a gag order issued by the appellate court.
“This is contemptuous and the PCC should be held liable for this,” he said.
The PCC, however, will not back down, saying that the deal is a matter of public interest and should be taken both seriously and carefully.
There are possible scenarios should the competition body be successful in completing the
review: the transaction could either be approved, disapproved, or conditionally approved.
Each has a largely different implication from the others, and unraveling the whole transaction would be a huge and costly mess for the parities involved.
The deal under question allowed San Miguel to take home P69.1 billion, and the two telcos a swathe of frequencies, which are seen to improve the quality of telecommunications services in the Philippines.