CEMCO HOLDINGS, INC., Petitioner, Petitioner, vs. NATIONAL LIFE INSURANCE COMPANY COMPANY OF THE PHILIPPINES, INC., Respondent. Tis Petition !or Revie" #nder R#$e %& o! te R#$es o! Co#rt see's to reverse (nd set (side te )% O*to+er )& De*ision - (nd te M(r* ) Reso$#tion) o! te Co#rt o! Appe($s in CA/G.R. SP No. 001&0 "i* (!!ir2ed te 3#d42ent5 d(ted -% Fe+r#(r6 )& o! te Se*#rities (nd E7*(n4e Co22ission 8SEC9 !indin4 t(t te (*:#isition o! petitioner Ce2*o Ho$din4s, In*. 8Ce2*o9 o! te s(res o! sto*' o! ;(*not(n Conso$id(ted Ind#stries, In*. 8;CI9 (nd At$(s Ce2ent Corpor(tio Corpor(tion n 8ACC9 in Union Ce2ent Ho$din4s Ho$din4s Corpor(tio Corpor(tion n 8UCHC9 8UCHC9 "(s *overed +6 te M(nd(tor6 O!!er R#$e #nder Se*tion -< o! Rep#+$i* A*t No. 01<<, oter"ise 'no"n (s te Se*#rities Re4#$(tion Code. Te F(*ts Union Ce2ent Corpor(tion 8UCC9, ( p#+$i*$6/$isted *o2p(n6, (s t"o prin*ip($ sto*'o$ders = UCHC, ( non/$isted *o2p(n6, "it s(res (2o#ntin4 to .&->, (nd petitioner Ce2*o "it -1.5>. M(3orit6 o! UCHC?s sto*'s "ere o"ned +6 ;CI "it )-.5-> (nd ACC "it )<.<>. Ce2*o, on te oter (nd, o"ned <> o! UCHC sto*'s. In ( dis*$os#re $etter d(ted & @#$6 )%, ;CI in!or2ed te Pi$ippine Sto*' E7*(n4e 8PSE9 t(t it (nd its s#+sidi(r6 ACC (d p(ssed reso$#tions to se$$ to Ce2*o ;CI?s sto*'s in UCHC e:#iv($ent to )-.5-> (nd ACC?s sto*'s in UCHC e:#iv($ent to )<.<>. In te PSE Cir*#$(r !or ;ro'ers No. 5-%/)% d(ted 0 @#$6 )%, it "(s st(ted t(t (s ( res#$t o! petitioner Ce2*o?s (*:#isition o! ;CI (nd ACC?s s(res in UCHC, petitioner?s tot($ +ene!i*i($ o"nersip, dire*t (nd indire*t, in UCC (s in*re(sed +6 5> (nd (2o#nted to (t $e(st &5> o! te s(res o! UCC, to "i "itt% P(rti*#$(rs
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As ( *onse:#en*e o! tis dis*$os#re, dis*$os#re, te PSE, in ( $etter to te SEC d(ted -& @#$6 )%, )%, in:#ired (s to "eter te Tender O!!er R#$e #nder R#$e -< o! te I2p$e2entin4 R#$es o! te Se*#rities Re4#$(tion Code is not (pp$i*(+$e to te p#r*(se +6 petitioner o! te 2(3orit6 o! s(res o! UCC. In ( $etter d(ted - @#$6 )%, Dire*tor @#stin( C($$(n4(n o! te SEC?s Corpor(te Fin(n*e Dep(rt2ent responded to te :#er6 o! te PSE t(t "i$e it "(s te st(n*e o! te dep(rt2ent t(t te tender o!!er r#$e "(s not (pp$i*(+$e, te 2(tter 2#st sti$$ (ve to +e *on!ir2ed +6 te SEC en +(n*. Tere(!ter, in ( s#+se:#ent $etter d(ted )1 @#$6 )%, Dire*tor C($$(n4(n *on!ir2ed t(t te SEC en +(n* (d reso$ved t(t te Ce2*o tr(ns(*tion "(s not *overed +6 te tender o!!er r#$e. On )0 @#$6 )%, !ee$in4 (44rieved (44rieved +6 te tr(ns(*tion, tr(ns(*tion, respondent respondent N(tion($ Li!e Ins#r(n*e Ins#r(n*e Co2p(n6 Co2p(n6 o! te Pi$ippines Pi$ippines,, In*., ( 2inorit6 2inorit6 sto*'o$de sto*'o$derr o! UCC, sent ( $etter $etter to Ce2*o Ce2*o de2(ndin4 te $(tter to *o2p$6 "it te r#$e on 2(nd(tor6 tender o!!er. Ce2*o, o"ever, re!#sed. On & A#4#st )%, ( S(re P#r*(se A4ree2ent "(s e7e*#ted +6 ACC (nd ;CI, (s se$$ers, (nd Ce2*o, (s +#6er. On -) A#4#st )%, te tr(ns(*tion "(s *ons#22(ted (nd *$osed. On -< A#4#st )%, respondent N(tion($ Li!e Ins#r(n*e Co2p(n6 o! te Pi$ippines, In*. !i$ed ( *o2p$(int "it te SEC (s'in4 it to reverse its )1 @#$6 )% Reso$#tion (nd to de*$(re te p#r*(se (4ree2ent o! Ce2*o void (nd pr(6in4 t(t te 2(nd(tor6 tender o!!er r#$e +e (pp$ied to its UCC s(res. I2p$e(ded in te *o2p$(int "ere Ce2*o, UCC, UCHC, ;CI (nd ACC, "i* "ere ten re:#ired +6 te SEC to !i$e teir respe*tive *o22ent on te *o2p$(int. In teir *o22ents, *o22ents, te6 "ere #ni!or2 in (r4#in4 n4 t(t te tender o!!er r#$e (pp$ied on$6 to ( dire*t dire*t (*:#isition o! te s(res o! te $isted *o2p(n6 (nd did not e7tend to (n indire*t (*:#isition (risin4 !ro2 te p#r*(se o! te s(res o! ( o$din4 *o2p(n6 o! te $isted !ir2. In ( De*ision d(ted -% Fe+r#(r6 )&, te SEC r#$ed in !(vor o! te respondent +6 reversin4 (nd settin4 (side its )1 @#$6 )% Reso$#tion (nd dire*ted petitioner Ce2*o to 2('e ( tender o!!er !or UCC s(res to respondent (nd oter o$ders o! UCC s(res si2i$(r to te *$(ss e$d +6 UCHC in (**ord(n*e "it Se*tion <8E9, R#$e -< o! te Se*#rities Re4#$(tion Code. Petitioner !i$ed ( petition "it te Co#rt o! Appe($s *($$en4in4 te SEC?s 3#risdi*tion to t('e *o4niB(n*e o! respondent?s *o2p$(int (nd its (#torit6 to re:#ire Ce2*o to 2('e ( tender o!!er !or UCC s(res, (nd (r4#in4 t(t te tender o!!er r#$e does not (pp$6, or t(t te SEC?s re/ interpret(tion o! te r#$e *o#$d not +e 2(de to retro(*tive$6 (pp$6 to Ce2*o?s p#r*(se o! UCHC s(res.
Te Co#rt o! Appe($s rendered ( de*ision (!!ir2in4 te r#$in4 o! te SEC. It r#$ed t(t te SEC (s 3#risdi*tion to render te :#estioned de*ision (nd, in (n6 event, Ce2*o "(s +(rred +6 estoppe$ !ro2 :#estionin4 te SEC?s 3#risdi*tion. It, $i'e"ise, e$d t(t te tender o!!er re:#ire2ent #nder te Se*#rities Re4#$(tion Code (nd its I2p$e2entin4 R#$es (pp$ies to Ce2*o?s p#r*(se o! UCHC sto*'s. Te de*ret($ portion o! te s(id De*ision re(ds IN IE OF THE FOREGOING, te (ss(i$ed de*ision o! te SEC is AFFIRMED, (nd te pre$i2in(r6 in3#n*tion iss#ed +6 te Co#rt LIFTED. & Ce2*o !i$ed ( 2otion !or re*onsider(tion "i* "(s denied +6 te Co#rt o! Appe($s. Hen*e, te inst(nt petition.
5. eter or not te :#estioned r#$in4 o! te SEC *(n +e (pp$ied retro(*tive$6 to Ce2*o?s tr(ns(*tion "i* "(s *ons#22(ted #nder te (#torit6 o! te SEC?s prior reso$#tion. On te !irst iss#e, petitioner Ce2*o *ontends t(t "i$e te SEC *(n t('e *o4niB(n*e o! respondent?s *o2p$(int on te ($$e4ed vio$(tion +6 petitioner Ce2*o o! te 2(nd(tor6 tender o!!er re:#ire2ent #nder Se*tion -< o! Rep#+$i* A*t No. 01<<, te s(2e st(t#te does not vest te SEC "it 3#risdi*tion to (d3#di*(te (nd deter2ine te ri4ts (nd o+$i4(tions o! te p(rties sin*e, #nder te s(2e st(t#te, te SEC?s (#torit6 is p#re$6 (d2inistr(tive. H(vin4 +een vested "it p#re$6 (d2inistr(tive (#torit6, te SEC *(n on$6 i2pose (d2inistr(tive s(n*tions s#* (s te i2position o! (d2inistr(tive !ines, te s#spension or revo*(tion o! re4istr(tions "it te SEC, (nd te $i'e. Petitioner stresses t(t tere is notin4 in te st(t#te "i* (#toriBes te SEC to iss#e orders 4r(ntin4 (!!ir2(tive re$ie!s. Sin*e te SEC?s order *o22(ndin4 it to 2('e ( tender o!!er is (n (!!ir2(tive re$ie! !i7in4 te respe*tive ri4ts (nd o+$i4(tions o! p(rties, s#* order is void.
In its 2e2or(nd#2, petitioner Ce2*o r(ises te !o$$o"in4 iss#es I. ASSUMING ARGUENDO THAT THE SEC HAS @URISDICTION OER NATIONAL LIFE?S COMPLAINT AND THAT THE SEC?S RE/INTERPRETATION OF THE TENDER OFFER RULE IS CORRECT, HETHER OR NOT THAT REINTERPRETATION CAN ;E APPLIED RETROACTIELY TO CEMCO?S PRE@UDICE. II. HETHER OR NOT THE SEC HAS @URISDICTION TO AD@UDICATE THE DISPUTE ;ETEEN THE PARTIES A UO OR TO RENDER @UDGMENT REUIRING CEMCO TO MAE A TENDER OFFER FOR UCC SHARES. III. HETHER OR NOT CEMCO?S PURCHASE OF UCHC SHARES IS SU;@ECT TO THE TENDER OFFER REUIREMENT.
Petitioner !#rter *ontends t(t in te (+sen*e o! (n6 spe*i!i* 4r(nt o! 3#risdi*tion +6 Con4ress, te SEC *(nnot, +6 2ere (d2inistr(tive re4#$(tion, *on!er on itse$! t(t 3#risdi*tion. Petitioner?s st(n*e !(i$s to pers#(de. In t('in4 *o4niB(n*e o! respondent?s *o2p$(int (4(inst petitioner (nd event#($$6 renderin4 ( 3#d42ent "i* ordered te $(tter to 2('e ( tender o!!er, te SEC "(s (*tin4 p#rs#(nt to R#$e -<8-59 o! te A2ended I2p$e2entin4 R#$es (nd Re4#$(tions o! te Se*#rities Re4#$(tion Code, to "it -5. io$(tion I! tere s($$ +e vio$(tion o! tis R#$e +6 p#rs#in4 ( p#r*(se o! e:#it6 s(res o! ( p#+$i* *o2p(n6 (t treso$d (2o#nts "ito#t te re:#ired tender o!!er, te Co22ission, #pon *o2p$(int, 2(6 n#$$i!6 te s(id (*:#isition (nd dire*t te o$din4 o! ( tender o!!er. Tis s($$ +e "ito#t pre3#di*e to te i2position o! oter s(n*tions #nder te Code.
I.
Te !ore4oin4 r#$e e2(n(tes !ro2 te SEC?s po"er (nd (#torit6 to re4#$(te, investi4(te or s#pervise te (*tivities o! persons to ens#re *o2p$i(n*e "it te Se*#rities Re4#$(tion Code, 2ore spe*i!i*($$6 te provision on 2(nd(tor6 tender o!!er #nder Se*tion -< tereo! . 1
HETHER OR NOT THE SEC DECISION, AS AFFIRMED ;Y THE CA DECISION, IS AN INCOMPLETE @UDGMENT HICH PRODUCED NO EFFECT.
Anoter provision o! te st(t#te, "i* provides te +(sis o! R#$e -<8-59 o! te A2ended I2p$e2entin4 R#$es (nd Re4#$(tions o! te Se*#rities Re4#$(tion Code, is Se*tion &.-8n9, viB
Si2p$6 st(ted, te !o$$o"in4 (re te iss#es
Te Co22ission s($$ (ve, (2on4 oters, te !o$$o"in4 po"ers (nd !#n*tions
-. eter or not te SEC (s 3#risdi*tion over respondent?s *o2p$(int (nd to re:#ire Ce2*o to 2('e ( tender o!!er !or respondent?s UCC s(res.
7777
). eter or not te r#$e on 2(nd(tor6 tender o!!er (pp$ies to te indire*t (*:#isition o! s(res in ( $isted *o2p(n6, in tis *(se, te indire*t (*:#isition +6 Ce2*o o! 5> o! UCC, ( p#+$i*$6/ $isted *o2p(n6, tro#4 its p#r*(se o! te s(res in UCHC, ( non/$isted *o2p(n6.
8n9 E7er*ise s#* oter po"ers (s 2(6 +e provided +6 $(" (s "e$$ (s tose "i* 2(6 +e i2p$ied !ro2, or "i* (re ne*ess(r6 or in*ident($ to te *(rr6in4 o#t o!, te e7press po"ers 4r(nted te Co22ission to (*ieve te o+3e*tives (nd p#rposes o! tese $("s.
Te !ore4oin4 provision +esto"s #pon te SEC te 4ener($ (d3#di*(tive po"er "i* is i2p$ied !ro2 te e7press po"ers o! te Co22ission or "i* is in*ident($ to, or re(son(+$6 ne*ess(r6 to *(rr6 o#t, te per!or2(n*e o! te (d2inistr(tive d#ties entr#sted to it. As ( re4#$(tor6 (4en*6, it (s te in*ident($ po"er to *ond#*t e(rin4s (nd render de*isions !i7in4 te ri4ts (nd o+$i4(tions o! te p(rties. In !(*t, to deprive te SEC o! tis po"er "o#$d render te (4en*6 in#ti$e, +e*(#se it "o#$d +e*o2e po"er$ess to re4#$(te (nd i2p$e2ent te $(". As *orre*t$6 e$d +6 te Co#rt o! Appe($s e (re nonete$ess *onvin*ed t(t te SEC (s te *o2peten*e to render te p(rti*#$(r de*ision it 2(de in tis *(se. A de!inite in!eren*e 2(6 +e dr("n !ro2 te provisions o! te SRC t(t te SEC (s te (#torit6 not on$6 to investi4(te *o2p$(ints o! vio$(tions o! te tender o!!er r#$e, +#t to (d3#di*(te *ert(in ri4ts (nd o+$i4(tions o! te *ontendin4 p(rties (nd 4r(nt (ppropri(te re$ie!s in te e7er*ise o! its re4#$(tor6 !#n*tions #nder te SRC. Se*tion &.- o! te SRC ($$o"s ( 4ener($ 4r(nt o! (d3#di*(tive po"ers to te SEC "i* 2(6 +e i2p$ied !ro2 or (re ne*ess(r6 or in*ident($ to te *(rr6in4 o#t o! its e7press po"ers to (*ieve te o+3e*tives (nd p#rposes o! te SRC. e 2#st +e(r in 2ind in interpretin4 te po"ers (nd !#n*tions o! te SEC t(t te $(" (s 2(de te SEC pri2(ri$6 ( re4#$(tor6 +od6 "it te in*ident($ po"er to *ond#*t (d2inistr(tive e(rin4s (nd 2('e de*isions. A re4#$(tor6 +od6 $i'e te SEC 2(6 *ond#*t e(rin4s in te e7er*ise o! its re4#$(tor6 po"ers, (nd i! te *(se invo$ves vio$(tions or *on!$i*ts in *onne*tion "it te per!or2(n*e o! its re4#$(tor6 !#n*tions, it "i$$ (ve te d#t6 (nd (#torit6 to reso$ve te disp#te !or te +est interests o! te p#+$i*.0 For s#re, te SEC (s te (#torit6 to pro2#$4(te r#$es (nd re4#$(tions, s#+3e*t to te $i2it(tion t(t te s(2e (re *onsistent "it te de*$(red po$i*6 o! te Code. A2on4 te2 is te prote*tion o! te investors (nd te 2ini2iB(tion, i! not tot($ e$i2in(tion, o! !r(#d#$ent (nd 2(nip#$(tive devises. T#s, S#+se*tion &.-849 o! te $(" provides Prep(re, (pprove, (2end or repe($ r#$es, re4#$(tions (nd orders, (nd iss#e opinions (nd provide 4#id(n*e on (nd s#pervise *o2p$i(n*e "it s#* r#$es, re4#$(tions (nd orders.
Te po"er *on!erred #pon te SEC to pro2#$4(te r#$es (nd re4#$(tions is ( $e4is$(tive re*o4nition o! te *o2p$e7it6 (nd te *onst(nt$6/!$#*t#(tin4 n(t#re o! te 2(r'et (nd te i2possi+i$it6 o! !oreseein4 ($$ te possi+$e *ontin4en*ies t(t *(nnot +e (ddressed in (dv(n*e. As en#n*i(ted in i*tori(s Mi$$in4 Co., In*. v. So*i($ Se*#rit6 Co22ission < R#$es (nd re4#$(tions "en pro2#$4(ted in p#rs#(n*e o! te pro*ed#re or (#torit6 *on!erred #pon te (d2inistr(tive (4en*6 +6 $(", p(rt('e o! te n(t#re o! ( st(t#te, (nd *o2p$i(n*e tere"it 2(6 +e en!or*ed +6 ( pen($ s(n*tion provided in te $(". Tis is so +e*(#se st(t#tes (re #s#($$6 *o#*ed in 4ener($ ter2s, (!ter e7pressin4 te po$i*6, p#rposes, o+3e*tives, re2edies (nd s(n*tions intended +6 te $e4is$(t#re. Te det(i$s (nd te 2(nner o! *(rr6in4 o#t te $(" (re o!ten ti2es $e!t to te (d2inistr(tive (4en*6 entr#sted "it its en!or*e2ent. In tis sense, it (s +een s(id t(t r#$es (nd re4#$(tions (re te prod#*t o! ( de$e4(ted po"er to *re(te ne" or (ddition($ $e4($ provisions t(t (ve te e!!e*t o! $(". Moreover, petitioner is +(rred !ro2 :#estionin4 te 3#risdi*tion o! te SEC. It 2#st +e pointed o#t t(t petitioner (d p(rti*ip(ted in ($$ te pro*eedin4s +e!ore te SEC (nd (d pr(6ed !or (!!ir2(tive re$ie!. In !(*t, petitioner de!ended te 3#risdi*tion o! te SEC in its Co22ent d(ted -& Septe2+er )%, !i$ed "it te SEC "erein it (sserted Tis Honor(+$e Co22ission is ( i4$6 spe*i($iBed +od6 *re(ted !or te p#rpose o! (d2inisterin4, overseein4, (nd 2(n(4in4 te *orpor(te ind#str6, s(re invest2ent (nd se*#rities 2(r'et in te Pi$ippines. ;6 te ver6 n(t#re o! its !#n*tions, it dedi*(ted to te st#d6 (nd (d2inistr(tion o! te *orpor(te (nd se*#rities $("s (nd (s ne*ess(ri$6 deve$oped (n e7pertise on te s#+3e*t. ;(sed on s(id !#n*tions, te Honor(+$e Co22ission is ne*ess(ri$6 t(s'ed to iss#e r#$in4s "it respe*t to 2(tters invo$vin4 *orpor(te 2(tters (nd s(re (*:#isitions. eri$6 "en tis Honor(+$e Co22ission rendered te R#$in4 t(t J te (*:#isition o! Ce2*o Ho$din4s o! te 2(3orit6 s(res o! Union Ce2ent Ho$din4s, In*., ( s#+st(nti($ sto*'o$der o! ( $isted *o2p(n6, Union Ce2ent Corpor(tion, is not *overed +6 te 2(nd(tor6 tender o!!er re:#ire2ent o! te SRC R#$e -<, it "(s "e$$ "itin its po"ers (nd e7pertise to do so. S#* r#$in4 s($$ +e respe*ted, #n$ess tere (s +een (n (+#se or i2provident e7er*ise o! (#torit6.-
A$so, Se*tion 1) o! te Se*#rities Re4#$(tion Code re(ds 1).-. 7 7 7 To e!!e*t te provisions (nd p#rposes o! tis Code, te Co22ission 2(6 iss#e, (2end, (nd res*ind s#* r#$es (nd re4#$(tions (nd orders ne*ess(r6 or (ppropri(te, 7 7 7. 1).). Te Co22ission s($$ pro2#$4(te r#$es (nd re4#$(tions providin4 !or reportin4, dis*$os#re (nd te prevention o! !r(#d#$ent, de*eptive or 2(nip#$(tive pr(*ti*es in *onne*tion "it te p#r*(se +6 (n iss#er, +6 tender o!!er or oter"ise, o! (nd e:#it6 se*#rit6 o! ( *$(ss iss#ed +6 it t(t s(tis!ies te re:#ire2ents o! S#+se*tion -1.). S#* r#$es (nd re4#$(tions 2(6 re:#ire s#* iss#er to provide o$ders o! e:#it6 se*#rities o! s#* d(tes "it s#* in!or2(tion re$(tin4 to te re(sons !or s#* p#r*(se, te so#r*e o! !#nds, te n#2+er o! s(res to +e p#r*(sed, te pri*e to +e p(id !or s#* se*#rities, te 2etod o! p#r*(se (nd s#* (ddition($ in!or2(tion (s te Co22ission dee2s ne*ess(r6 or (ppropri(te in te p#+$i* interest or !or te prote*tion o! investors, or "i* te Co22ission dee2s to +e 2(teri($ to ( deter2in(tion +6 o$ders "eter s#* se*#rit6 so#$d +e so$d.
Petitioner did not :#estion te 3#risdi*tion o! te SEC "en it rendered (n opinion !(vor(+$e to it, s#* (s te )1 @#$6 )% Reso$#tion, "ere te SEC opined t(t te Ce2*o tr(ns(*tion "(s not *overed +6 te 2(nd(tor6 tender o!!er r#$e. It "(s on$6 "en te *(se "(s +e!ore te Co#rt o! Appe($s (nd (!ter te SEC rendered (n #n!(vor(+$e 3#d42ent (4(inst it t(t petitioner *($$en4ed te SEC?s *o2peten*e. As (rti*#$(ted in Cero!err Re($t6 Corpor(tion v. Co#rt o! Appe($s-- i$e te $(*' o! 3#risdi*tion o! ( *o#rt 2(6 +e r (ised (t (n6 st(4e o! (n (*tion, neverte$ess, te p(rt6 r(isin4 s#* :#estion 2(6 +e estopped i! e (s (*tive$6 t('en p(rt in te ver6 pro*eedin4s "i* e :#estions (nd e on$6 o+3e*ts to te *o#rt?s 3#risdi*tion +e*(#se te 3#d42ent or te order s#+se:#ent$6 rendered is (dverse to i2. On te se*ond iss#e, petitioner (sserts t(t te 2(nd(tor6 tender o!!er r#$e (pp$ies on$6 to dire*t (*:#isition o! s(res in te p#+$i* *o2p(n6. Tis *ontention is not 2eritorio#s.
Tender o!!er is ( p#+$i*$6 (nno#n*ed intention +6 ( person (*tin4 ($one or in *on*ert "it oter persons to (*:#ire e:#it6 se*#rities o! ( p#+$i* *o2p(n6 . -) A p#+$i* *o2p(n6 is de!ined (s ( *orpor(tion "i* is $is ted on (n e7*(n4e, or ( *orpor(tion "it (ssets e7*eedin4 P&,,. (nd "it ) or 2ore sto*'o$ders, (t $e(st ) o! te2 o$din4 not $ess t(n - s(res o! s#* *o2p(n6. -5 St(ted di!!erent$6, ( tender o!!er is (n o!!er +6 te (*:#irin4 person to sto*'o$ders o! ( p#+$i* *o2p(n6 !or te2 to tender teir s(res terein on te ter2s spe*i!ied in te o!!er .-% Tender o!!er is in p$(*e to prote*t 2inorit6 s(reo$ders (4(inst (n6 s*e2e t(t di$#tes te s(re v($#e o! teir invest2ents. It 4ives te 2inorit6 s(reo$ders te *(n*e to e7it te *o2p(n6 #nder re(son(+$e ter2s, 4ivin4 te2 te opport#nit6 to se$$ teir s(res (t te s(2e pri*e (s tose o! te 2(3orit6 s(reo$ders. -& Under Se*tion -< o! Rep#+$i* A*t No. 01<<, it is st(ted Tender O!!ers. -<.-. 8(9 An6 person or 4ro#p o! persons (*tin4 in *on*ert "o intends to (*:#ire (t $e(st !i!teen per*ent 8-&>9 o! (n6 *$(ss o! (n6 e:#it6 se*#rit6 o! ( $isted *orpor(tion or o! (n6 *$(ss o! (n6 e:#it6 se*#rit6 o! ( *orpor(tion "it (ssets o! (t $e(st Fi!t6 2i$$ion pesos 8P&,,.9 (nd (vin4 t"o #ndred 8)9 or 2ore sto*'o$ders "it (t $e(st one #ndred 8-9 s(res e(* or "o intends to (*:#ire (t $e(st tirt6 per*ent 85>9 o! s#* e:#it6 over ( period o! t"e$ve 8-)9 2onts s($$ 2('e ( tender o!!er to sto*'o$ders +6 !i$in4 "it te Co22ission ( de*$(r(tion to t(t e!!e*tK (nd !#rnis te iss#er, ( st(te2ent *ont(inin4 s#* o! te in!or2(tion re:#ired in Se*tion -1 o! tis Code (s te Co22ission 2(6 pres*ri+e. S#* person or 4ro#p o! persons s($$ p#+$is ($$ re:#ests or invit(tions !or tender, or 2(teri($s 2('in4 ( tender o!!er or re:#estin4 or invitin4 $etters o! s#* ( se*#rit6. Copies o! (n6 (ddition($ 2(teri($ so$i*itin4 or re:#estin4 s#* tender o!!ers s#+se:#ent to te initi($ so$i*it(tion or re:#est s($$ *ont(in s#* in!or2(tion (s te Co22ission 2(6 pres*ri+e, (nd s($$ +e !i$ed "it te Co22ission (nd sent to te iss#er not $(ter t(n te ti2e *opies o! s#* 2(teri($s (re !irst p#+$ised or sent or 4iven to se*#rit6 o$ders. Under e7istin4 SEC R#$es,- te -&> (nd 5> treso$d (*:#isition o! s(res #nder te !ore4oin4 provision "(s in*re(sed to tirt6/!ive per*ent 85&>9. It is !#rter provided terein t(t 2(nd(tor6 tender o!!er is sti$$ (pp$i*(+$e even i! te (*:#isition is $ess t(n 5&> "en te p#r*(se "o#$d res#$t in o"nersip o! over &-> o! te tot($ o#tst(ndin4 e:#it6 se*#rities o! te p#+$i* *o2p(n6.-1 Te SEC (nd te Co#rt o! Appe($s r#$ed t(t te indire*t (*:#isition +6 petitioner o! 5> o! UCC s(res tro#4 te (*:#isition o! te non/$isted UCHC s(res is *overed +6 te 2(nd(tor6 tender o!!er r#$e. Tis interpret(tion 4iven +6 te SEC (nd te Co#rt o! Appe($s 2#st +e s#st(ined. Te r#$e in tis 3#risdi*tion is t(t te *onstr#*tion 4iven to ( st(t#te +6 (n (d2inistr(tive (4en*6 *(r4ed "it te interpret(tion (nd (pp$i*(tion o! t(t st(t#te is entit$ed to 4re(t "ei4t +6 te *o#rts, #n$ess s#* *onstr#*tion is *$e(r$6 so"n to +e in s(rp *ontr(st "it te 4overnin4 $(" or st(t#te.-0 Te r(tion($e !or tis r#$e re$(tes not on$6 to te e2er4en*e o! te 2#$ti!(rio#s needs o! ( 2odern or 2oderniBin4 so*iet6 (nd te est(+$is2ent o! diverse (d2inistr(tive (4en*ies !or (ddressin4 (nd s(tis!6in4 tose needsK it ($so re$(tes to (**#2#$(tion o! e7perien*e (nd 4ro"t
o! spe*i($iBed *(p(+i$ities +6 te (d2inistr(tive (4en*6 *(r4ed "it i2p$e2entin4 ( p(rti*#$(r st(t#te.-< Te SEC (nd te Co#rt o! Appe($s (**#r(te$6 pointed o#t t(t te *over(4e o! te 2(nd(tor6 tender o!!er r#$e *overs not on$6 dire*t (*:#isition +#t ($so indire*t (*:#isition or (n6 t6pe o! (*:#isition. Tis is *$e(r !ro2 te dis*#ssions o! te ;i*(2er($ Con!eren*e Co22ittee on te Se*#rities A*t o! ), on -1 @#$6 ). SEN. S. OSMEA. Eto (n4 2(n46(6(ri di6(n, e. So2e+od6 *ontro$s 1> o! te Co2p(n6. O! *o#rse, e "i$$ p(6 ( pre2i#2 !or te !irst 1>. Contro$ 6(n, e. E, '("("( 6#n4 24( 2(ii"(n, (n4 55> +e*(#se te v($#e o! te sto*' 2(r'et *o#$d 4o do"n, *o#$d 4o do"n (!ter t(t, +e*(#se tere "i$$ 8p. %-9 +e no 2ore 2(r'et. ($( n(n4 4#ston4 +#2ent(. ($( n(n4J I 2e(n 2(r(2in4 4#ston4 +#2ent(, "($(n4 4#ston4 +#2i$i '#n4 indi 6#n4 2(3orit6 o"ner. And te6 "i$$ not +#6. Te6 ($re(d6 (ve 1>. Te6 ($re(d6 (ve *ontro$. And tis prote*ts te 2inorit6. And "e (ve (d ( *(se in Ce+# "erein A6($( A "o ($re(d6 o"ned %> o! A6($( ; 2(de (n o!!er !or (noter %> o! A6($( ; "ito#t o!!erin4 te )>. ("("( n(2(n 6#n4 n('(("(' n4(6on n4 )>. An4 +(+( n4 s(re s( 2(r'et. ;#t "e did not (ve ( $(" prote*tin4 te2 (t t(t ti2e. CHAIRMAN ROCO. So "(t is it t(t 6o# "(nt to (*ieve SEN. S. OSMEA. T(t i! ( *ert(in 4ro#p (*ieves ( *ert(in (2o#nt o! o"nersip in ( *orpor(tion, 6e(, e is o+$i4(ted to +#6 (n6+od6 "o "(nts to se$$. CHAIRMAN ROCO. Pro/r(t( $(n4. 8p. %)9. 7777 REP. TEODORO. As $on4 (s it re(*es 5, (6(n n(. An6 t6pe o! (*:#isition 3#st (s $on4 (s it "i$$ res#$t in 5J 8p.&9J re(*es 5, (6(n n(. An6 t6pe o! (*:#isition 3#st (s $on4 (s it "i$$ res#$t in 5, 4ener($ tender, pro/r(t(.)8E2p(sis s#pp$ied.9 Petitioner *o#nters t(t te $e4is$(tor?s re!eren*e to (n6 t6pe o! (*:#isition d#rin4 te de$i+er(tions on te Se*#rities Re4#$(tion Code does not indi*(te t(t *on4ress 2e(nt to in*$#de te indire*t (*:#isition o! s(res o! ( p#+$i* *orpor(tion to +e *overed +6 te tender o!!er r#$e. Petitioner ($so (vers t(t it did not dire*t$6 (*:#ire te s(res in UCC (nd te in*ident($ +ene!it o! (vin4 (*:#ired te *ontro$ o! te s(id p#+$i* *o2p(n6 2#st not +e t('en (4(inst it. Tese (r4#2ents (re not *onvin*in4. Te $e4is$(tive intent o! Se*tion -< o! te Code is to re4#$(te (*tivities re$(tin4 to (*:#isition o! *ontro$ o! te $isted *o2p(n6 (nd !or te p#rpose o! prote*tin4 te 2inorit6 sto*'o$ders o! ( $isted *orpor(tion. (tever 2(6 +e te 2etod +6 "i* *ontro$ o! ( p#+$i* *o2p(n6 is o+t(ined, eiter tro#4 te dire*t p#r*(se o! its sto*'s or tro#4 (n indire*t 2e(ns, 2(nd(tor6 tender o!!er (pp$ies. As (ppropri(te$6 e$d +6 te Co#rt o! Appe($s Te petitioner posits t(t "(t it (*:#ired "ere sto*'s o! UCHC (nd not UCC. ;6 (ppenst(n*e, (s ( res#$t o! te tr(ns(*tion, it +e*(2e (n indire*t o"ner o! UCC. e (re *onstr(ined, o"ever, to *onstr#e o"nersip (*:#isition to 2e(n +ot dire*t (nd indire*t. (t is de*isive is te
deter2in(tion o! te po"er o! *ontro$. Te $e4is$(tive intent +eind te tender o!!er r#$e 2('es *$e(r t(t te t6pe o! (*tivit6 intended to +e re4#$(ted is te (*:#isition o! *ontro$ o! te $isted *o2p(n6 tro#4 te p#r*(se o! s(res. Contro$ 2(6 +e e!!e*ted tro#4 ( dire*t (nd indire*t (*:#isition o! sto*', (nd "en tis t('es p$(*e, irrespe*tive o! te 2e(ns, ( tender o!!er 2#st o**#r. Te +otto2$ine o! te $(" is to 4ive te s(reo$der o! te $isted *o2p(n6 te opport#nit6 to de*ide "eter or not to se$$ in *onne*tion "it ( tr(ns!er o! *ontro$. 7 7 7. )-
It is (pp(rent t(t priv(te respondent 2is*on*eived te i2port o! te r#$in4. Te de*ision in Co$#2+i( Pi*t#res does not 2e(n t(t i! ( ne" r#$e is $(id do"n in ( *(se, it so#$d not +e (pp$ied in t(t *(se +#t t(t s(id r#$e so#$d (pp$6 prospe*tive$6 to *(ses (risin4 (!ter"(rds. Priv(te respondent?s vie" o! te prin*ip$e o! prospe*tive (pp$i*(tion o! ne" 3#di*i($ do*trines "o#$d t#rn te 3#di*i($ !#n*tion into ( 2ere (*(de2i* e7er*ise "it te res#$t t(t te do*trine $(id do"n "o#$d +e no 2ore t(n ( di*t#2 (nd "o#$d deprive te o$din4 in te *(se o! (n6 !or*e.
As to te tird iss#e, petitioner stresses t(t te r#$in4 on 2(nd(tor6 tender o!!er r#$e +6 te SEC (nd te Co#rt o! Appe($s so#$d not (ve retro(*tive e!!e*t or +e 2(de to (pp$6 to its p#r*(se o! te UCHC s(res (s it re$ied in 4ood !(it on te $etter d(ted )1 @#$6 )% o! te SEC "i* opined t(t te proposed (*:#isition o! te UCHC s(res "(s not *overed +6 te 2(nd(tor6 o!!er r#$e.
Indeed, "en te Co#rt !or2#$(ted te enpi$ do*trine, "i* "e reversed in tis *(se, te Co#rt did not de!er (pp$i*(tion o! te r#$e $(id do"n i2posin4 ( !ine on te e2p$o6er !or !(i$#re to 4ive noti*e in ( *(se o! dis2iss($ !or *(#se. To te *ontr(r6, te ne" r#$e "(s (pp$ied ri4t ten (nd tere. 7 7 7.
Te (r4#2ent is not pers#(sive. Te (*tion o! te SEC on te PSE re:#est !or opinion on te Ce2*o tr(ns(*tion *(nnot +e *onstr#ed (s p(ssin4 2erits or 4ivin4 (pprov($ to te :#estioned tr(ns(*tion. As (pt$6 pointed o#t +6 te respondent, te $etter d(ted )1 @#$6 )% o! te SEC "(s notin4 +#t (n (pprov($ o! te dr(!t $etter prep(red +6 Dire*tor C($$(n4(. Tere "(s no p#+$i* e(rin4 "ere interested p(rties *o#$d (ve +een e(rd. Hen*e, it "(s not iss#ed #pon ( de!inite (nd *on*rete *ontrovers6 (!!e*tin4 te $e4($ re$(tions o! p(rties tere+6 2('in4 it ( 3#d42ent *on*$#sive on ($$ te p(rties. S(id $etter "(s 2ere$6 (dvisor6. @#rispr#den*e (s it t(t (n (dvisor6 opinion o! (n (4en*6 2(6 +e stri*'en do"n i! it devi(tes !ro2 te provision o! te st(t#te. )) Sin*e te $etter d(ted )1 @#$6 )% r#ns *o#nter to te Se*#rities Re4#$(tion Code, te s(2e 2(6 +e disre4(rded (s "(t te SEC (s done in its de*ision d(ted -% Fe+r#(r6 )&. Ass#2in4 (r4#endo t(t te $etter d(ted )1 @#$6 )% *onstit#tes ( r#$in4, te s(2e *(nnot +e #ti$iBed to deter2ine te ri4ts o! te p(rties. (t is to +e (pp$ied in te present *(se is te s#+se:#ent r#$in4 o! te SEC d(ted -% Fe+r#(r6 )& (+(ndonin4 te opinion e2+odied in te $etter d(ted )1 @#$6 )%. In Serr(no v. N(tion($ L(+or Re$(tions Co22ission, )5 (n (r4#2ent "(s r(ised si2i$(r to te *(se #nder *onsider(tion. Priv(te respondent terein (r4#ed t(t te ne" do*trine prono#n*ed +6 te Co#rt so#$d on$6 +e (pp$ied prospe*tive$6. S(id post#$(tion "(s i4nored +6 te Co#rt "en it r #$ed i$e ( 3#di*i($ interpret(tion +e*o2es ( p(rt o! te $(" (s o! te d(te t(t $(" "(s ori4in($$6 p(ssed, tis is s#+3e*t to te :#($i!i*(tion t(t "en ( do*trine o! tis Co#rt is overr#$ed (nd ( di!!erent vie" is (dopted, (nd 2ore so "en tere is ( revers($ tereo!, te ne" do*trine so#$d +e (pp$ied prospe*tive$6 (nd so#$d not (pp$6 to p(rties "o re$ied on te o$d do*trine (nd (*ted in 4ood !(it. To o$d oter"ise "o#$d +e to deprive te $(" o! its :#($it6 o! !(irness (nd 3#sti*e ten, i! tere is no re*o4nition o! "(t (d tr(nspired prior to s#* (d3#di*(tion.
L(st$6, petitioner ($$e4es t(t te de*ision o! te SEC d(ted -% Fe+r#(r6 )& is in*o2p$ete (nd prod#*es no e!!e*t. Tis *ontention is +(se$ess. Te de*ret($ portion o! te SEC de*ision st(tes In vie" o! te !ore4oin4, te $etter o! te Co22ission, si4ned +6 Dire*tor @#stin( F. C($$(n4(n, d(ted @#$6 )1, )%, (ddressed to te Pi$ippine Sto*' E7*(n4e is ere+6 REERSED (nd SET ASIDE. Respondent Ce2*o is ere+6 dire*ted to 2('e ( tender o!!er !or UCC s(res to *o2p$(in(nt (nd oter o$ders o! UCC s(res si2i$(r to te *$(ss e$d +6 respondent UCHC, (t te i4est pri*e it p(id !or te +ene!i*i($ o"nersip in respondent UCC, stri*t$6 in (**ord(n*e "it SRC R#$e -<, Se*tion <8E9.)% A re(din4 o! te (+ove r#$in4 o! te SEC reve($s t(t te s(2e is *o2p$ete. It orders te *ond#*t o! ( 2(nd(tor6 tender o!!er p#rs#(nt to te pro*ed#re provided !or #nder R#$e -<8E9 o! te A2ended I2p$e2entin4 R#$es (nd Re4#$(tions o! te Se*#rities Re4#$(tion Code !or te i4est pri*e p(id !or te +ene!i*i($ o"nersip o! UCC s(res. Te pri*e, on te +(sis o! te SEC de*ision, is deter2in(+$e. Moreover, te i2p$e2entin4 r#$es (nd re4#$(tions o! te Code (re s#!!i*ient to in!or2 (nd 4#ide te p(rties on o" to pro*eed "it te 2(nd(tor6 tender o!!er. HEREFORE, te De*ision (nd Reso$#tion o! te Co#rt o! Appe($s d(ted )% O*to+er )& (nd M(r* ), respe*tive$6, (!!ir2in4 te De*ision d(ted -% Fe+r#(r6 )& o! te Se*#rities (nd E7*(n4e Co22ission En ;(n*, (re ere+6 AFFIRMED. Costs (4(inst petitioner.
