Questions have been raised on why the Securities and Exchange Commission chose to involve itself in an intra-corporate dispute involving The Medical City even while the Securities Regulation Code mandated that all such disputes be decided by regional trial courts.
In a 141-page petition filed with the Court of Appeals, lawyers of TMC pointed out that the SEC not only involved itself in an intra-corporate dispute, it also violated its own rules as well as ignoring the rulings of the Regional Trial Court and the CA.
The SEC had issued several decisions favorable to TMC’s former CEO Dr. Alfredo Bengzon while courts had already upheld the validity of the hospital’s shareholders to vote in a new board in 2018 and in 2019.
Recently, doctors of TMC came up with a paid advertisement in several newspapers publicly expressing their opinion that Bengzon should stay away from managing the hospital again.
Bengzon, who holds only 0.11% of TMC shares, has been trying to claim control of the company by filing cases with the SEC.
Jose Xavier Gonzales, current chairman of the board of TMC, explained his frustration with the SEC ruling.
“Everything we did was guided by adhering to the law and the SRC, so we were surprised that the SEC, which has in its own records all our documents, claims that we did not disclose any of our actions. They themselves gave us approval to conduct a mandatory tender offer to all the minority shareholders of TMC in April 2018. But now they say we were hiding information that they themselves possessed in their files, ” he said.
TMC’s intra-corporate dispute started in 2018, when then CEO Bengzon refused to hold the legally mandated shareholder elections scheduled in June of that year.
Doctors and shareholders, upset over the violation of their rights to vote, banded together to hold a special shareholder meeting and voted in a new board and a new management team led by Dr. Eugenio Jose F. Ramos as CEO.
Based on audited financial results for 2019, TMC had the highest revenue on record under the first full year of Dr. Ramos; TMC Ortigas grew more than 7%, while at the same time managing costs which had spiraled out of control under the previous management.