SEC En Banc Case No. 02-12-143 Iwaki Co., Ltd. vs. Iwaki Chemical Pumps Philippines, Inc.

Republic of the Philippines Department of Finance Securities and Exchange Commission SEC Building, EDSA, Greenhills, Mandaluyong City

IWAKI CO., LTD. Petitioner, SEC Admin. Case No. 02-12-143

- versus - For: Revocation of Corporate Registration

IWAKI CHEMICAL PUMPS PHILIPPINES, INC., Respondent.

X

DECISION

Before the Commission En Banc is the Petition for Revocation of Corporate Registration under Sec. 121 of the Corporation Code in relation to Section 6 of PD 902-A filed by Iwaki Co., Ltd. ("petitioner") on 27 January 2012 against Iwaki Chemical Pumps Phils., Inc. ("respondent")

Respondent is a duly-registered corporation with the Securities and Exchange Commission on 05 April 2000 under SEC Registration No. A200005087.' Petitioner, on the other hand, is a foreign corporation and was one of respondent's stockholders.

In the Petition,3 it was alleged that petitioner, Nikko Sources International Corporation ("Nikko") and Iwaki-Taiwan entered into a Joint Venture Agreement ("JVA")

on 14 February 2000 and subsequently, petitioner and respondent entered into an Exclusive for the establishment of respondent to be named "Iwaki Chemical Pumps Philippines, Inc.

Distribution Agreement ("EDA") on 01 January 2005 giving the latter license to be the sole distributor in the Philippines of Iwaki products. It was also alleged that petitioner, through a Notice dated 24 December 2008, terminated the EDA with respondent due to the latter's failure to settle its obligations, and thereafter, terminated the JVA with Nikko.

Petitioner averred that respondent ignored its demand and continues to exist today as a body corporate using the expression "Iwaki" and the Iwaki logo although no longer authorized to the utmost prejudice of petitioner. It pointed out that respondent no longer filed with the Commission its General Information Sheet since 2009 and its Audited Financial Statements for the years 2005, 2008, 2009, 2010 and 2011.4

I Id., pp. I - 58. 2 Id., p. 33. 4 Id., pp. 2 -- 3. ' Records, p. 35. 1

Iwaki Co., Ltd. v. Iwaki Chemical Pumps Phils., Inc. SEC Admin. Case No. 02-12-143

Page 2 of 3

Extension of Time to File an Answer.' On 2 April 2012, respondent filed an Answer still doing business under the name and logo of "Iwaki" in its business operation. arguing, among others, that the petition should have been summarily dismissed on the ground of SEC's lack of jurisdiction for being an intra-corporate controversy that should be resolved in regular courts. It was also averred that the petition shows no evidence that respondent is On 09 March 2012, respondent filed an Entry .of Appearance and Motion for

On 3 April 2012, petitioner filed a Motion to Render Judgment,7 insisting that respondent should be declared in default because the latter's Answer was filed beyond the alleged that its Motion for Extension of Time to File Answer is a prohibited pleading under prescribed period under Section 3-11, Rule III of the 2006 SEC Rules of Procedure. It

Section 3-6, Rule III of the same Rules, thus, it did not toll the running of the period to file an Answer.

to revoke Iwaki Chemical Pump Philippines Inc.'s Certificate of Registration. The ultimate issue to be resolved in this Petition is whether there is sufficient ground

Thus, respondent is considered to be "in default" pursuant to Section 3-12 of the same Rules. Section 3-11, Rule III of the 2006 SEC Rules of Procedure. Respondent's Motion for Extension of Time to File Answer is a prohibited pleading as provided for in Section 3-6, Rule III of the same Rules, which did not toll the running of the period to file an Answer. At the outset, respondent filed its Answer beyond the prescribed period given by

Granting for the sake of argument that the Answer could be taken cognizance of by the Commission, we still find the Petition to be meritorious.

of corporations, partnerships or associations, upon any of the grounds provided by law. Presidential Decree No. 902-A (PD 902-A), as amended, empowers the Commission to suspend, or revoke, after proper notice and hearing the franchise or certificate of registration Section 5 (m) of the Securities Regulation Code and Section 6, paragraph (l) of

to file reportorial requirements is one of the grounds for revocation of the certificate of registration of corporations, viz Section 6, paragraph (l) (6) of PD 902-A, as amended, expressly provides that failure

possess the following powers:xxx "Sec. 6. In order to effectively exercise such jurisdiction, the Commission shall XXX XXX

the grounds provided by law, including the following:xxxxxx certificate of registration of corporations, partnerships or associations, upon any of (l) To suspend, or revoke, after proper notice and hearing, the franchise or XXX

7 Id., Pp. 106 - 113. 5 Records, pp. 70-73. Id., pp. 84-105.

Iwaki Co., Ltd. v. Iwaki Chemical Pumps Phils., Inc. SEC Admin. Case No. 02-12-143 Page 3 of 3

Commission within the prescribed period. (6) Failure to file required reports on appropriate forms as determined by the

pursuant to Sec. 141 of the Corporation Code.' Clearly, there is sufficient ground to revoke 2008, 2009, 2010, 2011 and 2012 Audited Financial Statements and 2009, 2010, 2011, 2012 and 2013 General Information Sheets, among other reports required by the Commission the Certificate of Registration issued to respondent. In the present case, records show that respondent continuously failed to file its 2005.

Accordingly,the Certificate of Registration of ' IWAKICHEMICAL PUMPS PHILIPPINES,INC. is hereby REVOKED WHEREFORE, premises considered, the instant petition is hereby GRANTED.

Department for its information and appropriate action. Let a copy of this Order be furnished the Company Registration and Monitoring

SO ORDERED.

Mandaluyong City, 12 September 2013.

TERESITA J. HERBOSA Chairperson

h0 MA. JUANITAE. CUETO MANUEL O B. GAITE

Commissioner Commissioner

M

ELADIO Commissioner I. JALA ANTONIETA F. IBE Commissioner

prescribed by the Securities and Exchange Commission. Records, pp. 2-3, 115. together with a financial statement of its assets and liabilities, certified by any independent certified public accountant in appropriate cases, covering the preceding fiscal year and such other requirernents as the Securities the Philippines shall submit to the Securities and Exchange Commission an annual report of its operation and Exchange Commission may require. Such report shall be submitted within such period as may be Sec. 141. Annual report of corporations.- Every corporation, domestic or foreign, lawfully doing business in