Already beset with full capacity for COVID patients, a shortage of healthcare workers, and a delay in being paid bills now worth a staggering P750 Million by PhilHealth, The Medical City (TMC) now faces an additional challenge to its operations imposed by the Securities and Exchange Commission.
“Our healthcare workers continue to deliver world-class healthcare to the Filipino public during this time of COVID, even as we work to ensure that our nation-wide operations are not disrupted due to the glaring errors in the SEC decision,” said Jose Xavier ‘Eckie’ Gonzales, Chairman of TMC. “For example, where in the law, or even in any other case, can you see the SEC telling a private corporation how to classify shares, how these shares should be sold, and when these shares can be paid? It’s almost as if they were preparing the way for a favored party to buy shares of TMC.”
“While there is never a good time to get decisions on shareholder disputes, the SEC decision comes at a really bad time,” says Dr. Eugenio Jose F. Ramos, Chief Executive Officer of TMC. “The last thing our staff needs right now is even more uncertainty –it’s hard enough to face patients who may or may not have COVID. It’s hard enough for them to come home worrying that they might be exposing their family to COVID. Now they also have to worry about what is going to happen to their hospital.”
Releasing its decision last week, the SEC effectively asked TMC to go back to its ownership structure in 2013, and return the money to investors who had infused capital into the then ailing hospital. Based on corporate records for 2013, the major shareholders then were Lombard (a San Francisco-based fund), the Jesuits, the Religious of the Virgin Mary, and Mr. Gonzales, who was already, at that time, the largest individual shareholder. Dr. Alran Bengzon had, and still only has, one-tenth of 1 percent of TMC shares.
The SEC decision will not increase his shares as he had declined to participate in putting in money for the capital calls. Rulings from the Regional Trial Court and the Court of Appeals have already pointed out that Dr Bengzon cannot expect to exercise control of a company in which he owns less than 1 percent of shares. Lawyers have also pointed out the SEC has no jurisdiction to determine fraud. Unlike court decisions, which have trials and opposing counsels that allow judges to fully understand the information presented, the SEC decides a case based only on select interviews and paperwork