APC Group, Inc.

February 29, 2000 PSE CIRCULAR FOR BROKERS NO. 512-00 SUBJECT : APC Group, Inc . This is with reference to the news article entitled "APC files P150-M suit vs. Ongpin group" published in the February 28, 2000 issue of the Philippine Daily Inquirer. The article reported that APC Group, Inc. ("APC") and its main subsidiary, Philippine Global Communications Inc. ("Philcom"), has filed a damage suit against the group led by businessman Roberto Ongpin for allegedly stealing Philcom's Internet business in favor of PhilWeb.Com, Inc. In its letter, APC stated that: ". . . We-confirm that APC Group, Inc. filed a suit for damages against Mr. Roberto Ongpin, et al., as reported today in the Philippine Daily Inquirer. The case is entitled "APC Group. Inc., Philippine Global Communications, Inc., and Philcom Interactive Systems, Inc. vs. Roberto Ongpin, Alex Villamar, Sonia K. Pamatmat, Almario Velasco, Rozanna Calingin, PhilWeb.Com, Inc., South Seas Natural Resources, Inc. (now named PhilWeb.Com, Inc.) and John and Jane Does," for the Declaration of Constructive Trust, Accounting Reconveyance and Damages. It was filed on February 24, 2000 with the Securities and Exchange Commission and docketed as SEC Case No. 02-00-6546. The complaint was filed by APC on behalf of Philippine Global Communications, Inc. ("Philcom") in a derivative capacity as a Philcom shareholder, and on behalf of Philcom Interactive Systems, Inc. ("Philcom Interactive") in a double derivative capacity, Philcom being a shareholder of Philcom Interactive. Respondent Ongpin is the incumbent Chairman of the Boards of Philcom and Philcom Interactive while Mr. Villamar is a director of Philcom. The rest of the individual respondents are former officers of the two companies. The complaint states that Philcom Interactive (formerly named Philcom Enterprise, Inc. and previously engaged in trading), recognizing the tremendous business opportunities offered by new technological advances, decided to change its corporate purposes in order to spearhead the Philippine segment of the Information Technology ("IT") revolution. As a result, In June 1999, it developed a complete and integrated Business Plan geared towards taking advantage of these new technologies and advances in e-commerce and Internet-based business seizing the lead in the development of such activities in the Philippines. Respondents Ongpin and Villamar, being Chairman and President, respectively, of Philcom and Philcom Interactive, have the responsibility and duty of pursuing, implementing, executing, and seeing to the success of the aforesaid Integrated Business Plan. Instead, respondents took undue advantage-of their high corporate positions and appropriated to themselves Philcom Interactive's corporate opportunities and its very own business, pre-empted the companies' pioneering business, wrestled the companies' lead in the Internet-driven business, foreclosed competition from the companies, and destroyed the companies. Using both Philcom's and Philcom Interactive's resources assets, and personnel .respondents organized PhilWeb.Com, Inc. ("PhilWeb"), a rival internet company , in flagrant violation of the trust reposed on them as officers and directors of Philcom and Philcom Interactive. Furthermore, as the complaint states, respondent Ongpin, while holding on to his position as Chairman of the Boards of Philcom and Philcom Interactive, committed the following acts of betrayal against said companies: 1. pirated respondents Villamar, Pamatmat, Velasco, and Calingin, who in turn pirated other key personnel of Philcom and Philcom Interactive. Respondent Ongpin and the other individual respondents utilized Philcom's and Philcom Interactive's own Information Technology department to train and educate the officers they intended to pirate, and succeeded in pirating, from said companies, for the benefit of rival PhilWeb; 2. negotiated with potential partners, co-venturers and investors; 3. launched an aggressive advertising campaign to pre-empt Philcom Interactive's promising Internet business and foreclose any competition from the Company. In view of the foregoing, complainants seek the following reliefs against the respondents: (1) a declaration of any and all past, present and future earnings, profits, gains, and benefits obtained, being obtained, or to be obtained by respondents by reason of, arising from, in connection with, or incident to, their unjust and unlawful acts and deeds, as being held in constructive trust for the benefit of Philcom and Philcom Interactive; (2) an order directing respondents, jointly and severally, to fully, completely, and faithfully account for any and all such earnings, profits, gains, and benefits, and to reconvey all such earnings, profits, gains and benefits, or pay their value of at least P100 million, to Philcom and Philcom Interactive; (3) an award of actual and exemplary damages against the respondents in the amount of P1 million and P50 million., respectively. for their unjust and unlawful (a) appropriation of the corporate and business opportunities properly belonging to Philcom and Philcom Interactive, and (b) acquisition of interest adverse to said corporations in respect of matters reposed to respondents in confidence; and LexLib (4) an award of attorney's fees and litigation expenses in the amount of at least P10 million and P300,000.00, respectively. . . ." For your information. (SGD.) MARIA ISABEL T. GARCIA OIC, Listings & Disclosure Group