PHILIPPINE VETERANS BANK v. CALLANGAN (FREGILLANA) 6. SEC En banc: Dismissed the appeal of the Bank for lack of merit.

August 3, 2011 | Brion, J. | What are considered as public companies 7. CA: Dismissed the petition filed by the Bank.

PETITIONER: Philippine Veterans Bank ISSUE/s:

RESPONDENTS: Justina Callangan 1. Whether Philippine Veterans Bank is considered as a public company. –
YES
SUMMARY: On March 17, 2004, respondent Justina Callangan (Director of the
RULING: SC denied the petition.
Corporation Finance Department of SEC), informed Philippine Veterans Bank
that it has been classified as a public company, thus being classified as such,
Philippine Veterans Bank (“Bank”) shall then comply with the reportorial
requirements as provided under the Securities Regulation Code. The Bank
responded that it cannot be classified as a public company because it is private RATIO:
company whose shares of stock are available only to a limited class or sector
which are the World War II veterans and its shares of stocks are not open to the As cited by the Supreme Court:
general public. Director Callangan rejected the assertions of the Bank. The Bank
Under Subsection 17.1 of the SRC:
was then assessed a penalty amounting to Php 1,937, 262.80 for its failure to
comply with the required reportorial requirements under the SRC. c) An issuer with assets of at least Fifty million pesos
(₱50,000,000.00) or such other amount as the Commission shall
DOCTRINE: Under Rule 3(1)(m) of the Amended Implementing Rules and
prescribe, and having two hundred (200) or more holders each
Regulations of the SRC, it was defined therein that: A “public company" is
holding at least one hundred (100) shares of a class of its equity
defined as "any corporation with a class of equity securities listed on an
securities: Provided, however, That the obligation of such issuer to
Exchange or with assets in excess of Fifty Million Pesos (₱50,000,000.00) and
file reports shall be terminated ninety (90) days after notification to
having two hundred (200) or more holders, at least two hundred (200) of which
the Commission by the issuer that the number of its holders
are holding at least one hundred (100) shares of a class of its equity securities."
holding at least one hundred (100) shares is reduced to less than
one hundred (100).

Likewise, under Rule 3(1)(m) of the Amended Implementing Rules and Regulations
of the SRC, it was defined therein that:
FACTS:
1. On March 17, 2004, respondent Justina Callangan (Director of the
A “public company" is defined as "any corporation with a class of
Corporation Finance Department of SEC), informed Philippine Veterans
Bank that it has been classified as a public company, thus being classified equity securities listed on an Exchange or with assets in excess of
as such, Philippine Veterans Bank (“Bank”) shall then comply with the Fifty Million Pesos (₱50,000,000.00) and having two hundred
reportorial requirements as provided under the Securities Regulation Code. (200) or more holders, at least two hundred (200) of which are
2. The Bank responded that it cannot be classified as a public company holding at least one hundred (100) shares of a class of its equity
because it is private company whose shares of stock are available only to a securities."
limited class or sector which are the World War II veterans and its shares of
stocks are not open to the general public.
3. Director Callangan rejected the assertions of the Bank. The Bank was then
assessed a penalty amounting to Php 1,937, 262.80 for its failure to comply
with the required reportorial requirements under the SRC.
4. Bank: Moved for reconsideration
5. Callangan: Denied the MR.
In view of the foregoing, those which are considered as public companies are not
limited to those which are publicly listed but also those companies which satisfy the
above requirements as set by the SRC. It cannot be denied from the record the the
excess assets of the Bank exceed Php 50 million and that it has 395,998
shareholders. Therefore, it is bound to comply with the reportorial requirements
under the SRC.