Extelcom asks Court of Appeals to junk Marifil motion
() - April 6, 2009 - 12:00am

MANILA, Philippines - Express Telecommunications Co. Inc. (Extelcom) is asking the Court of Appeals to junk for lack of merit the motion for reconsideration filed by shareholder Marifil Holdings which is opposing Extelcom’s rehabilitation.

Marifil Holdings wants the CA to reconsider its earlier decision that the former’s opposition to Extelcom’ rehabilitation should be heard by the Manila Regional Trial Court and not the Securities and Exchange Commission (SEC) as insisted by Lopez-controlled Marifil.

According to Marifil, this is not an intra-corporate case but simply an opposition to the dilution of its shareholdings in Extelcom because of a debt to equity conversion following a capital restructuring exercise which it had wanted the SEC to nullify.

Because of the said debt to equity conversion, Marifil’s stake in Extelcom has been reduced to four percent from 46 percent. The conversion was initiated by TransDigital Extel, now the majority stakeholder of Extelcom, which is also in talks for the sale of its Extelcom stake to San Miguel Corp. (SMC).

“The arguments so desperately being peddled by the petitioner (Marifil) are nothing more than misinterpretations of law and jurisprudence, abundantly interspersed with unbridled sophistry, and therefore deserve scant consideration,” Extelcom said.

Extelcom pointed out that this is an intra-corporate dispute that is under the jurisdiction of the regular court and not the SEC, which is an administrative agency, as it involves the company and its shareholder Marifil and Marifil’s objection to its dilution as a result of the rehabilitation.

Extelcom said the Interim Rules of Procedure on Corporate Rehabilitation provides that the remedy for this is the timely filing of a motion before the rehabilitation court.

It pointed out that Marifil should have asked the rehabilitation court for the revocation of its approval of the rehabilitation plan instead of filing a petition before the SEC questioning the registration of the amended articles of incorporation.

In this case, since the petition for rehabilitation was still pending before the Manila RTC at the time Marifil supposedly “discovered” the approval by the SEC of Extelcom’s Amended Articles of Incorporation, its grievance should have been ventilated before the said RTC but it failed to do so, it added

“For having slept on its rights, both law and equity dictate that the petitioner should not be allowed to forestall the ongoing rehabilitation of Extelcom and that it should thereby endure the consequences of its failure to properly assert its claims,” Extelcom said.

AMENDED ARTICLES OF INCORPORATION CORPORATE REHABILITATION COURT OF APPEALS EXPRESS TELECOMMUNICATIONS CO EXTELCOM INTERIM RULES OF PROCEDURE MANILA REGIONAL TRIAL COURT MARIFIL MARIFIL AND MARIFIL MARIFIL HOLDINGS REHABILITATION
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