CA affirms PLDT, Globe buyout deal of SMC’s telco assets
INQINQUIRER.net
03:42 PM October 23, 2017
http://business.inquirer.net/
The Court of Appeals (CA) has affirmed the Philippine Long Distance Telephone Company (PLDT) and Globe Telecommunications’ P70-billion buyout deal of the telco assets of San Miguel Corporation (SMC).
“With the subject notice being compliant with the requirements of MC (Memorandum Circular)16-002 and there being no false material statement therein, the subject acquisition is deemed approve by operation of law and may no longer be challenged under the PCA (Philippine Competition Act),” the appeals court said.
“It follows that PCC is duty-bound to recognize that status and give effect thereto. The petition for mandamus (filed by PLDT and Globe) is, therefore meritorious,” the appeals court added.
The appeals court added that aside from compliance with the Memorandum Circular, the 30 day period under the PCA which was extended to 60 days required for the PCC to come up with a ruling on the review of the acquisition have lapsed.
Under the PCA, any agreement such as that of the acquisition entered into by PLDT, Globe and SMC will not be consummated within 30 days while the commission is conducting a review and requested additional documents to the parties to complete its study.
The law provides that the total period for review shall not exceed 90 days from the initial notification of the parties.
Thus, the appeals court said if the subject acquisition was not deemed approved, PCC had 60 days from June 7, 2016 to Aug. 6, 2016 to resolve the matter. The appeals court pointed out that the said date was before it issued a preliminary injunction against PCC on Aug. 26, 2016.
“There being no decision promulgated on the part of PCC involving the subject acquisition before the expiration of the 60 day period under the PCA, there can be no doubt that the subject acquisition is now already deemed approved,” the appeals court added.
The appeals court issued the injunction in 2016 as it pointed out that both PLDT and Globe Telecom were able to establish the existence of a clear positive right that needs judicial protection during the pendency of the main case.
It will be recalled that PCC, in its Letters dated June 7 and June 17, 2016, ordered the pre-acquisition review and investigation of the acquisition made by PLDT and Globe of all the issuing and outstanding shares and assets of Vega Telecom Inc., a subsidiary of SMC.
Pursuant to the Sale and Purchase Agreement executed on May 30, 2016, for an agreed purchase price of P52,080,764,982 under a deferred payment scheme (the sum of P26,040,382,490 was paid upon the execution of the contract, P13,020,191,246 to be paid on December 1, 2016 and P13,020,191,246 to be paid on May 30, 2017).
Both PLDT and Globe purchased on an equal sharing or 50-50 basis the entire issued and outstanding shares of stock of VTI.
The PCC Letters issued against both PLDT and Globe was hailed to the CA seeking to stop the former with its orders.
The decision granting the mandamus petition by both PLDT and Globe was written by Associate Justice Ramon M. Bato Jr. and concurred in by Associate Justice Manuel Barrios and Maria Elisa Sempio Diy. /je
