A group of shareholders of the Medical City recently lauded the resolution and show-cause order issued by the Securities and Exchange Commission, saying these will pave the way to “a just and fair resolution” of the conflict currently hounding the medical institution.
A special hearing panel of the SEC formally charged several entities identified with the Singaporean investor firm Clermont with violations of several provisions of the Securities Regulation Code.
These include Viva Holdings, Fountel, FAI and Professional Services Inc.
According to the SEC resolution, the said entities “misrepresented their independence from each other to effectively subscribe to substantial shares in PSI and eventually acquired majority shares in the target company to the prejudice of the unsuspecting stockholders whose share value and voting power have declined”.
The SEC said the group “entered into a funding scheme” where foreign funds were channeled from the Singaporean firm Viva Holdings to several Philippine-registered companies identified with erstwhile Medical City treasurer Jose Xavier Gonzales.
The SEC charged Gonzales’ group with violating provisions of the SRC which prohibit “fraudulent, manipulative and deceptive act or practice in connection with any tender offer”.
It also charged the group with violating SRC provisions which make mandatory for “groups of persons acting in concert who intend to acquire 35 percent or more of equity shares in a public company to disclose such intention and contemporaneously make a tender offer for the percent sought to all shareholders”.
The SEC slapped the group with a show-cause order, giving them 15 days to explain why they should not be held liable to the formal charges.
Medical City shareholders led by former president Dr. Alfredo Bengzon said the SEC order would ensure that the “scheme used by the the Clermont-backed group will be thoroughly probed and exposed”.
Bengzon and several other shareholders earlier filed a complaint before the Securities and Exchange Commission questioning the validity of the acquisition of a 54-percent stake in PSI by Gonzales’ companies and Viva Holdings.
Bengzon, in his petition, alleged that the Singaporean-backed group, through “fraudulent, deceptive and manipulative actions, acquired and increased their shareholding from at least 35 percent to more than 50 percent.”
Bengzon specifically questioned a shareholder agreement and a $38-million loan inked between Viva and Gonzales’ companies. He said that the recent SEC order and resolution “have exposed the effort to conceal the scheme and deprive shareholders of their rights”.