CEMCO HOLDINGS v. NATIONAL LIFE INSURANCE COMPANY OF PHILIPPINES, GR NO.

171815,
2007-08-07
Facts:
Union Cement Corporation (UCC), a publicly-listed company, has two principal stockholders -
UCHC, a non-listed company, with shares amounting to 60.51%, and petitioner Cemco with
17.03%. Majority of UCHC's stocks were owned by BCI with 21.31% and ACC with 29.69%. Cemco,
on the... other hand, owned 9% of UCHC stocks.
BCI informed the Philippine Stock Exchange (PSE) that it and its subsidiary ACC had passed
resolutions to sell to Cemco BCI's stocks in UCHC equivalent to 21.31% and ACC's stocks in UCHC
equivalent to 29.69%.
Issues:
Simply stated, the following are the issues:
Whether or not the SEC has jurisdiction over respondent's complaint and to require Cemco to
make a tender offer for respondent's UCC shares.
Whether or not the rule on mandatory tender offer applies to the indirect acquisition of shares in a
listed company, in this case, the indirect acquisition by Cemco of 36% of UCC, a publicly-listed
company, through its purchase of the shares in UCHC, a non-listed... company.
Whether or not the questioned ruling of the SEC can be applied retroactively to Cemco's
transaction which was consummated under the authority of the SEC's prior resolution.
Ruling:
Petitioner's stance fails to persuade.
The foregoing provision bestows upon the SEC the general adjudicative power which is implied
from the express powers of the Commission or which is incidental to, or reasonably necessary to
carry out, the performance of the administrative duties entrusted to it.
as the incidental power to conduct hearings and render decisions
SEC has the competence to render the particular decision it made in this case.
SEC has the authority to promulgate rules and regulations, subject to the limitation that the same
are consistent with the declared policy of the Code.
The power conferred upon the SEC to promulgate rules and regulations is a legislative recognition
of the complexity and the constantly-fluctuating nature of the market and the impossibility of
foreseeing all the possible contingencies that cannot be addressed in advance.
petitioner is barred from questioning the jurisdiction of the SEC. It must be pointed out that
petitioner had participated in all the proceedings before the SEC and had prayed for affirmative
relief.
Petitioner did not question the jurisdiction of the SEC when it rendered an opinion favorable to it
It was only when the case was before the
Court of Appeals and after the SEC rendered an unfavorable judgment against it that petitioner
challenged the SEC's competence.