My conspiracy theory on the Meralco takeover issue

OKAY, so Ms. RP and I were debating yesterday about the Meralco stockholders' issue. For reasons of her own, she was siding with Fatty Winston of the GSIS while I was technically siding with Lolo Manolo. (I mean why entrust an important company like Meralco to the devil you don't know right? I'll stick with the devil I know.)

Anyhoo, our discussion basically revolved around the legality of the cease-and-desist order issued by the Securities and Exchange Commission to put the Meralco stockholders' meeting under the agency's jurisdiction. Ms. RP believes Meralco should have respected the legal document.

But I said the Lopezes were correct in going ahead with the counting of all proxy votes. In the first place, their point was to stay in control of management, so damn the torpedoes man! Count those proxies and bahala na si Batman. They can deal with the SEC later and sue the agency if need be for interfering in the meeting. That was a brilliant legal strategy, if I say so myself. That way, no matter how long the case drags out at the SEC or in court, the Lopezes will still be in power. If they had recognized the CDO, obviously they would have lost their company to the GSIS goon.

There were many questions raised about that SEC CDO. Why was it not dated? Why was there no docket number? Why was there no stamp/seal of the office? Why did only one commissioner (Jesus Martinez) sign the CDO?

To the lack of a date, the SEC spokesman explained to ANC that it was an "oversight." I mean duh? The spokesman added that the agency really has no dry seal of its logo. Wha? And commissioner Martinez signed the CDO on behalf of all the commissioners? Uhm...

That got me thinking...I don't think these SEC commissioners are idiots who would take a legal document like a CDO for granted. They have a battery of lawyers over there so something as simple as putting a date on a document and putting a docket number is SOP? How could this be an oversight?

An agency without a dry seal of its logo, and this a regulatory agency might I add, is just plain wooky! I just don't buy that. Mura lang magpagawa ng dry seal stamp sa Recto noh?!

Then only one commissioner signing the CDO? The SEC commissioners act as a collegial body and should have met and investigated first Fatty Winston's request that 1.9 million proxy votes of the Lopezes be disqualified, before issuing a CDO. There was no evidence that there was even a meeting.

What's more, check out these relevant paragraphs of the Securities Regulation Code of 2000:

"SEC 5.2.of the SRC: The Commission’s jurisdiction over all cases enumerated under Section 5 of Presidential Decree No. 902-A is hereby transferred to the Courts of general jurisdiction or the appropriate Regional Trial Court: Provided, that the Supreme Court in the exercise of its authority may designate the Regional Trial Court branches that shall exercise jurisdiction over these cases."

and Presidential Decree 902-A

"SEC. 5 of PD 902-A: In addition to the regulatory and adjudicative functions of the Securities and Exchange Commission over corporations, partnerships and other forms of associations registered with it as expressly granted under existing laws and decrees, it shall have original and exclusive jurisdiction to hear and decide cases involving.

(a) Devices or schemes employed by or any acts, of the board of directors, business associates, its officers or partnership, amounting to fraud and misrepresentation which may be detrimental to the interest of the public and/or of the stockholder, partners, members of associations or organizations registered with the Commission;

(b) Controversies arising out of intra-corporate or partnership relations, between and among stockholders, members, or associates; between any or all of them and the corporation, partnership or association of which they are stockholders, members or associates, respectively; and between such corporation, partnership or association and the state insofar as it concerns their individual franchise or right to exist as such entity; and

(c) Controversies in the election or appointments of directors, trustees, officers or managers of such corporations, partnerships or associations."

SO my brilliant theory is, the SEC commissioners were probably badgered by Fatty Winston into issuing the CDO (which doesn't look beneath him with the way he arrogantly carries himself), so the commissioners, not wanting to get caught in this mess, deliberately issued an infirm document to give the Lopezes enough legroom to respond appropriately to it.

The SEC Commissioners know their place, know the law, and know their functions. These are not stupid people. They know the agency can no longer handle intra-corporate disputes, but probably not having any way out, were forced to issue a CDO anyway which everyone says is a first in Philippine SEC and corporate history. Not any other time in history, we are told, has the SEC interfered in a stockholders meeting right before said meeting was to be held.

So there. That's my conspiracy theory. If it is true, then bravo to Martinez and company for thinking up this brilliant strategy. Anyhoo, let's see how the corporate drama plays out today at the SEC.