SEC En Banc Case No. 06-02-01 Complaint filed on 12 February 2002 by Monsignor Pedro Quitorio, Bishop HOnesto Ongtioco and Archbishop Oscar V. Cruz (complainants) praying, among other, for the dissolution of CBCPNET CORPORATION.

1936 T SEC Bldg., EDSA, Greenhills, Mandaluyong City Securities and Exchange Commission Republic of the Philippines Department of Finance

IN DISSOLUTION THE MATTER OF OF CBCPNET THE

CORPORATION SEC En Banc Case No. 06-02-01

ARCHBISHOP OSCAR V. CRUZ, MONSIGNOR BISHOP HONESTO ONGTIOCO AND PEDRO Complainants. QUITORIO For: Dissolution of a Corporation

DECISION

For the consideration of the Commission En Banc is the Complaint' filed on 12

Oscar V. Cruz (complainants) praying, among others, for the dissolution of CBCPNET February 2002 by Monsignor Pedro Quitorio, Bishop Honesto Ongtioco and Archbishop Corporation (CBCPNET)

November 2000 with SEC Registration No. A200017485.2 The primary purpose of on a wholesale or retail basis.3 The complainants were the minority stockholders of stockholders.4 CBCPNET is to engage in the business of trading goods such as pre-paid internet cards CBCPNET and spouses Eman J. Lim and Mardie B. Lim were the majority Appellant CBCPNET was a company duly registered with the Commission on 2C

In their Complaint, the complainants state that they are filing the said Complaint pursuant to Section 5(a), Republic Act No. 8799 and Section 121 of the Corporation

have absconded and have abandoned CBCPNET. Code. They allege therein that the majority stockholders brought the company into financial ruin by amassing an estimated Php 177 million in debt. Moreover, the majority stockholders did not start a decent bookkeeping of financial transactions and disregarded the issuances of receipts and records of disbursements. Further, the majority stockholders

1 Petition for Review of the complainants dated 28 August 2002 and filed with the Court of Appeals on 29 2 Certificate of Incorporation of CBCPNET issued by the Commission on 20 November 2000; Records, p. 5 Id., pars. 1, '6, 7, 8 and 9. 3 Second Article of the Articles of Incorporation of CBCPNET; Records, p. 204. August 2002, Annex "C" (Complaint of the complainants dated 30 January 2002) Complaint, pars. 2 and 3. 205

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The complainants believe that the continued operation or existence of CBCPNET is inimical to the public interest and to their interest, and that the withdrawal of the franchise/charter by way of dissolution is in order. Thus, the complainants pray, among others, that the Commission issue an order dissolving CPBCNET. 6

In a Letter of the Commission dated 16 April 2002 addressed to CBCPNET, it states that the latter failed to submit and register its Stock and Transfer Book.

In another Letter of the Commission dated 21 May 2002 addressed to CBCPNET it states that the latter failed to submit the following: (i) General Information Sheet (GIS) for the year 2002; (ii) Financial Statements for the year 2001; and (iii) Stock and Transfer Book.

Jesus E.G. Martinez of the Commission.' During the hearing, the complainants were On 29 May 2002, the complainants appeared in a hearing before Commissioner

informed that the Commission has no jurisdiction over their Complaint since it is a dissolution based on mismanagement. However, the complainants agreed to submit to the Commission the financial statements of CBCPNET.

On 17 June 2002, the complainants filed a Manifestation before the Commission claiming that an audit of the financial affairs of CBCPNET has been started. Moreover, they stated that Republic Act No. 8799 did not expressly divest the Commission of its authority to hear petitions for dissolution and that the subject matter of the Complaint does not involve an intra-corporate controversy."

In a Decision dated 20 June 2002, the Commission En Banc dismissed the Complaint for lack of jurisdiction since the provisions under the Corporation Code, particularly Section 121, are not applicable. The Commission En Banc stated Section 121 of the Corporation Code is not applicable since the grounds for the revocation of a certificate of registration of a corporation enumerated in Section 6(l) of P.D. 902-A are not present in the case. Moreover, Commission En Banc treated the Complaint as an off- shoot of an intra-corporate dispute that involves mismanagement, auditing and possible criminal action. In which case, the Commission En Banc states that redress should have been sought in the courts of general jurisdiction.

: Id., par. 9.2 and Annex "F" (Letter of the Commission dated 21 May 2002). 6 Id., p.3. Io Id., par. 1l. 7 Petition for Review of the complainants dated 28 August 2002 and filed with the Court of Appeals on 29 12 Id. Annex " A" (Decision of the Commission En Banc, p. 2-4). I Id., par. 12 and Annex "H" (Manifestation of the complainants dated 11 June 2002). Id., par. 10. August 2002, par. 9.1 and Annex "E" (Letter of the Commission dated 19 April 2002).

In the Matter of the Dissolution of

SEC En Banc Case No. 06-02-01 CBCPNET Corporation

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After the denial by Commission En Banc of the Motion for Reconsideration filed by the complainants,13 the matter was elevated to the Court of Appeals by the said complainants in which they assail the Decision and denial of their Motion for Reconsideration of the Commission En Banc.14

After an exchange of pleadings, the Court of Appeals rendered a Decision on 14 October 2004 stating that the Commission has the power to dissolve juridical entities for reasons or causes detrimental to public interest as well as to existing laws, rules and regulations. Section 6(l) of PD 902-A authorizes the Commission to suspend or revoke, after proper notice and hearing, the franchise or certificate of registration of corporations upon any of the grounds provided by law, including: (i) serious misrepresentation as to what a corporation can do or is doing to the great prejudice or damage to the general public; and (ii) failure to file the required reports. Further, the Court of Appeals states that, in effect, the complaint filed before the Commission is an action to revoke or cancel the certificate of registration of CBCPNET for the latter's failure to file the necessary reports and for committing serious misrepresentation. Lastly, the acts complained of are not considered intra-corporate controversies.'

In light of the foregoing, the Court of Appeals set aside the Decision and the Resolution of the Commission En Banc denying complainant's Motion for Reconsideration, and remanded the case back to the Commission for further

final and executory and is recorded in the book of entry of judgments of the said court.1? proceedings. 16 6On 9 November 2004, the Decision of the Court of Appeals has become

However, further proceedings for the dissolution of CBCPNET are no longer required. Records will show that CBCPNET failed to file its GIS for the years 2001 to 2005 and its Financial Statements for the years 2001 to 2005.18 Under Section 22 of the Corporation Code, the continuous non-filing of reports may be construed as a failure to formally organize and commence the business of the corporation which renders it dissolved. More pertinent to this case is that such continuous non-filing of reports may also be construed as a continuous inoperation of the business of CBCPNET19 which is a ground for the revocation of its Certificate of Registration pursuant to the said section As consequence of such non-filing of reports, the Company Registration and Monitoring Department (CRMD) of the Commission issued an Order dated 2 August 2006

17 Entry of Judgment by the Court of Appeals received by the Commission on 26 April 2005; Records, p. 13 Id., Annex "B" (Resolution of the Commission En Banc dated 30 July 2002). 18 Records, p. 208. 19Order of the CRMD dated 29 August 2014, entitled "In the Matter of J'Art Construction and 15 Decision of the Court of Appeals, p. 7-12. 16 Id, p. 12. 14 Petition for Review of the complainants dated 28 August 2002. 144.

Development Corp., et al."

In the Matter of the Dissolution of CBCPNET Corporation SEC En Banc Case No. 06-02-01 Page 4 of 4

effectively revoking the Certificate of Registration of CBCPNET.20 Hence, no further proceedings in the dissolution of CBCPNET is required considering that its Certificate of Registration is revoked.

Department has already revoked the Certificate of Registration of CBCPNET Corporation for non-compliance with the reportorial requirements, the prayer for revocation is hereby declared MOOT. WHEREFORE, considering that the Company Registration and Monitoring

information and appropriate action. Department and the Economic Research and Information Department for their Let a copy of this Order be furnished the Company Registration and Monitoring

SO ORDERED

Mandaluyong City, 16 June 2015

TERESITA J. HERBOSA

Chairperson

MANUELHUB Commissioner TO B. GAITE ANTONIETA F. IBE Commissioner

EPHYRO LUIS B. AMATONG * BTIA JAMES G.VITERBO wnie

Commissioner Commissioner

* On Official Business

20 Memorandum of the Company Registration and Monitoring Department (CRMD) dated 7 May 2009 addressed to the Office of the General Counsel; Records, p. 206.