Opinion No. 06-18 RE : "Hold-over principle"

..... ' •. ' fu :.: . ' •. . •. . •. . •. . •. : •. : ~: ~•. ' Republic of the Philippines Department of Finance SECURITIES AND EXCHANGE COMMISSION SEC Building, EDSA, Greenhills Mandaluyong City Metro Manila Philippines 20 March 2006. SEC Opinion No. 06-18 "Hold-over principle" MR. MELlON C. VENTURA 3 Redemption St, GSIS Village, Barangay Sangandaan, Quezon City Sir: This refers to your letter dated 07 February 2006 requesting opinion on the queries posed therein, Relative thereto, please be informed that the Commission lost its jurisdiction over cases involving election controversies and appointment of officers, Section 5 of Presidential Decree No. 902-A provides: "Section 5. In addition to the regulatory and adjudicative functions of the Securities and Exchange Commission over corpora tions, 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: c.. Controversies in the election or appointments of directors, trustees, officers or managers of such corporations, partnerships or associations. xxx xxx xxx" .: , "

'J:\:;:fjw~~; .;;~lli.\;;r" ..;;J,:'1~/~}:~~~';"'~;~;']f;rt(;~it';'i;it~{~.gKA:th~iS,$~~rJties~egulation (;iri'}~[i:;t;g.,ptt:<?ve~.~~~~~!n()"X;S(J~~lz~Rlei'~y!WeRegwnal Code,. the aforecited TrIal Court, thus: . l,,;'i';i" . 2';'J;>\'{Sec~~n'5:2;~; The O)Inmission's jurisdiction over all cases I' ~'1; :=;;:~d::~:~~~ ~fOf:.:;~:~e:~~~:~ r:.~~2-~:r;;::~ r ::~:~~c:::"query, yourBy-laws categorically providesfor a one I! (1) year term for all elected officers. However, there is no provision which disqualifies an incumbent officer from seeking another term of office. Furthermore, it should be noted that the phrase "until their successors are duly elected and installed" simply establishes the rule on "hold-over" but does not prohibit an incumbent officer from seeking reelection. A "hold-over" situation arises when no successor is elected due to valid and justifiable reasons. Thus, the incumbent holds over and continues to function until another officer is chosen and qualified.1 Very truly yours, VERNETTE G. UMALI-PACO General Counsel I SEC Opinion addressed to Mr. Alfdredo P. Palmiery dated June 24, 1998.