The real truth
MAILBOX (The Philippine Star) - September 2, 2013 - 12:00am

We write in response to the letter of Zamora Poblador Vasquez & Bretaña (ZAMORA) published in your Mailbox section on Aug. 30th. We believe it is important to correct the many falsehoods that this law firm and other associates of dissident minority shareholder Jose Ricafort have been disseminating.

Before we go into detail, we note that Zamora is not counsel to our company, Nationwide Development Corp. (Nadecor or the “company”), as it claims. Zamora is in fact the legal counsel to the family members of dissident minority shareholder Ricarfort who are the complainants in the Court of Appeals case against our company, which they lost and are now appealing. If they are litigating a case against Nadecor, how can they be Nadecor’s counsel?

We strongly encourage you and your readers to consider the following facts and points:

1. The Calalang board is the Nadecor board recognized by the Court of Appeals

A legal dispute arose in August 2011 in relation to the election of directors for Nadecor for 2011 – 2012. The latest definitive position on said dispute can be found in the Court of Appeal (CA) decision promulgated Feb. 18, 2013. In that decision, the CA conclusively decided in favor of the petitioners being the elected chairman (former Secretary of Foreign Affairs Roberto R. Romulo), a majority of elected directors including company president Conrado T. Calalang, and Nadecor itself, stating:

“The annual stockholders’ meeting of Nadecor held on Aug. 15, 2011 is hereby declared valid and the board of directors and officers elected thereat are declared lawfully elected. Any and all acts of the board of director selected during the Aug. 15, 2011 Nadecor annual stockholders’ meeting are declared valid. …. Likewise, the writ of preliminary Injunction dated June 13, 2012 is made permanent (covering orders prohibiting the Ricafort group from scheduling and holding stockholders’ meetings, the ratification of rescission of agreements with St. Augustine Gold & Copper and the election of a new board of directors).”

The losing parties in the CA case have since filed an appeal to the Supreme Court (“SC”). The appeal has not had any success and therefore the CA decision continues to have full legal force and effect.

2. The Supreme Court has ruled against Ricafort’s allies, 15-0

Associates of Ricafort have tried to challenge CA decisions on this matter and to cast doubt on the integrity of the CA justices. Their complaint to the SC was dismissed unanimously and on all grounds by the full SC in a decision promulgated Feb. 19, 2013. The SC ruled that:

“The members of the Special 14th Division acted collectively and in good faith and their resolution granting a writ of preliminary injunction in the consolidated CA petitions enjoys a presumption of regularity...The complainants have no personality to assail the injunctive writ.”

We refer you to the official Nadecor website,, which features links to the full texts of the above referenced decisions by our country’s highest Courts.

3. The board and officers elected on Aug. 19, 2013 at 12:30 pm at Discovery Suites, Ortigas Center, Pasig City are the only legally recognized representatives of Nadecor

As a consequence of the CA’s ruling, there is no doubt that the board and officers elected at the 2013 Nadecor annual general meeting and subsequent organizational meeting, which were held in full compliance with the company’s articles and bylaws, are the legitimate representatives of the company. A full list of the Company’s elected directors and officers, who are led by re-elected chairman Roberto R. Romulo and president Conrado T. Calalang, can be found on the Nadecor website.

4. Jose Ricafort is a dissident minority shareholder

Zamora has erroneously claimed that Ricafort is the majority shareholder. In fact, he and his family only own approximately 25 percent of the company’s shares, whereas the Calalang Group (comprised of the Calalang family, St. Augustine and allied independent investors) owns 67 percent of its shares.

Ricafort and his associates have actively defied the CA’s lawful orders by misrepresenting themselves as representatives of Nadecor and running a “shadow” corporation to the detriment of Nadecor shareholders. They have opted to cause disruption to the rightful Calalang board which has endeavored to focus on its fiduciary duties to generate shareholder value and adhere to respected corporate governance and procedures.

5. St. Augustine Gold & Coppers Ltd. (SAU) is a stockholder of record of Nadecor and the King-king project

Zamora has claimed that SAU’s investments in Nadecor and the King-king Project (the Project) have not been registered with the Bangko Sentral ng Pilipinas (“BSP”). Ricafort associate Jose de Jesus has stated that this is the basis for their alleged and unauthorized rescission of the MOU with SAU. We point out that neither Philippine law nor agreements between Nadecor and SAU make BSP registration of SAU’s foreign investment mandatory. Registration with the BSP is intended purely to aid foreign investors in the sourcing of foreign currency if the foreign investor wishes to repatriate dividends or their investment abroad. We further note that SAU fully intends to register its investment with the BSP.

We also confirm that SAU’s investment in the project was fully ratified by the Nadecor board when Ricafort was still a Board member, and that SAU’s recent $43.5 million investment in Nadecor was also fully ratified by the Nadecor board.

6. SAU and Nadecor’s partnership is in full force and effect, and SAU has added considerable value to the project

We further note that SAU has added considerable value to the project, by bringing in significant foreign direct investment, rendering extensive technical expertise and services that have been properly reimbursed on anarms length basis, and delivering the Benguet settlement package. The company has reviewed the preliminary feasibility study for the project and is satisfied that considerable progress has been achieved.  The study is expected to be published by the joint venture partners in the near future, and will demonstrate the strong viability of the project.

SAU is listed on the main board of the Toronto Stock Exchange and is run by industry leaders who have a proven record of discovering, exploring and developing valuable mining assets around the world. One of the largest shareholders in SAU is Queensberry Mining and Development Corp., the resource investment arm of the family of former Sen. Manny Villar. Following its investment of $11 million in May 2013, Queensberry now holds 18 percent of SAU and has the option to increase its holding up to 32 percent.

7. Volume IX of Nadecor’s stock and transfer book (“STB”) is valid

Zamora has claimed that the recently issued Volume IX of the Nadecor STB is spurious and that the issuance is being contested by the Ricafort group. We note that the law enables a new STB to be issued by the SEC when the former STB is lost, destroyed or inaccessible. Zamora has admitted that the old volumes of the STB were retained by the previous corporate secretary, instead of being correctly turned over to the rightful board and new corporate secretary of Nadecor. Despite legal attempts by the Nadecor board to obtain the STB, access was unlawfully refused and no proof was given that such volumes remained untouched and intact. Consequently, the Nadecor board rightly applied to the SEC for a new volume which the SEC in due and proper discharge of its duties so granted the issuance.

8. We have taken action to prevent improper withdrawal of funds

Nadecor has frozen certain bank accounts and transferred funds to safeguarded accounts in order to prevent the Ricafort Group from illegally accessing company resources. We note that the actions of the dissident minority group have caused financial harm for the company and the company is currently in the process of assessing such damage, and will not hesitate to take legal action on this matter.

9. The authorities have supported Nadecor control of the project

In fulfillment of its duty to the government to preserve and protect its tenement from lawless elements and illegal miners, Nadecor employs Beagle Investigative and Detective Agency (BIDA), a well regarded local private security agency that is fully accredited and serves corporate clients such as the SM Group of Companies and leading agri-businesses in the region. During the past year, Nadecor has had to contend with sporadic harassment from illegally armed members of Ricafort’s private army. Following are excerpts from the investigation report submitted by the Pantukan Municipal Police to the Provincial Direcor of the ComVal Police Provincial Office on Aug. 26, regarding the recent armed attack by Ricafort’s illegal private army on Nadecor ‘s security force:

“...on or about 10:55pm of Aug. 24, 2013 that alleged more or less 20 lawless armed group led by Bandajar Adona aka Banon harassed and fired gun with the used of cal .45, m16 rifle and other unidentified long firearms at Campo 2, Kingking, Pantukan,Comval. … As per evidence gathered by SOCO and Investigation Team at the crime scene the aggressor group and assault Building 2 was the Ricafort side based on the assorted spent shells of firearms recovered meters away from the base camp 2 where the watchmen and security guards of Calalang group were occupying…. Conclusion: Based on the facts and circumstances presented, there was a harassment committed by the Ricafort group, as the unlawful aggressor who perpetrated the said harassment and the Calalang group was forced to defend themselves on the said assault.”

Banon, the leader of Ricafort’s private army, has pending warrants of arrest issued against him for various criminal cases. Although our security force suffered no fatalities, the incident resulted in the unfortunate death of one of Ricafort’s men. As reported in the Sun Star Davao on Aug. 28, Pantukan’s police chief, Inspector Clifford John Nabor stated that the fatality, “succumbed to gunshot wounds in his back thus it is highly possible that he was accidentally killed by his comrades when they attacked the Calalang Group camp in the middle of the night.”

We are grateful to the authorities for intervening swiftly and dispersing Ricafort’s private army, and for placing our tenement under joint PNP-AFP protection to prevent further hostilities. Whereas Ricafort’s men have fled the area, our security force remains on site and is actively working with the authorities to locate the perpetrators of this illegal attack. We intend to file criminal cases against those individuals who are apprehended.

With regards to Zamora’s statement that a complaint for robbery has been filed against officers of the Calalang group, we are confident that this will be thrown out as the court recognized Nadecor representatives were merely safeguarding company assets, which are all properly accounted for.

In closing, we call on you and your readers to be vigilant against further false claims by the dissident minority Ricafort Group and Zamora, who does not represent Nadecor and is in fact leading litigation against our Company. We also call on Zamora to cease and desist from making further false statements, and the members of the Ricafort Group to halt their illegal statements and activities that have resulted not only in the delay of an important flagship project that could bring much needed foreign direct investment to the country and thousands of jobs to Compostela Valley, but have also resulted in unfortunate violence.

Leocadio S. Nitorreda, Nadecor General Counsel and Chief Operating Officer


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