In re Multi-Line Communications, Inc.

April 22, 2008 SEC EN BANC CASE NO. 01-08-0349 IN THE MATTER OF MULTI-LINE COMMUNICATIONS, INC. (FORMERLY: MULTI-LINE CONSTRUCTION INTERNATIONAL, INC.) (SEC REG. NO. 147436) , petitioner . FOR: SETTING ASIDE OF THE ORDER OF REVOCATION OF CERTIFICATE OF REGISTRATION O R D E R Petitioner Multi-Line Communications, Inc. (formerly: Multi-Line Construction International, Inc.) is a stock corporation registered with the Commission on 08 January 1988 1 the primary purpose of which is to "engage in the business of providing telecommunications services in and between the villages, barangays, municipalities, cities and provinces in the Philippines and other countries and territories, including but not limited to the construction, establishment, installation, maintenance and operation, for commercial purposes, of basic and enhanced telecommunications systems." 2 Its principal office is located in Metro Manila, Philippines. 3 On 29 September 2003, Petitioner's Certificate of Registration No. 147436 was revoked pursuant to the Order dated 20 August 2003 for non-compliance with the Commission's reportorial requirements. Said Order was published in a newspaper of general circulation on 28 August 2003. Petitioner now prays for the setting aside of the said Order of Revocation based on the following grounds: a) [it] is a grantee of a valid and existing legislative franchise. Republic Act No. 8721 : "AN ACT GRANTING MULTI-LINE CONSTRUCTION INTERNATIONAL, INC. A FRANCHISE TO CONSTRUCT, ESTABLISH, INSTALL, MAINTAIN AND OPERATE LOCAL EXCHANGE NETWORK IN THE PHILIPPINES"; The Franchise was granted July 16, 1998 and has an existence of 25 years or until year 2023, and renewable for another 25 years; b) [its] application for a Certificate of Public Convenience and Necessity (CPCN) to install, operate and maintain public payphones and calling stations in 14 selected municipalities of Benguet and 12 municipalities of Agusan del Norte with prayer for Provisional Authority (PA) from the National Telecommunications Commission (NTC) was granted on September 27, 2000; c) [it] signed a Memorandum of Undertaking (MOU) with the Telecommunications Office (TELOF), an attached agency of the Department of Transportation and Communication (DOTC), for a Pilot Project consisting of supply, installation, operation and maintenance of payphones in the provinces of Benguet, Agusan del Norte and Misamis Oriental covered by the networks and backbone of DOTC-TELOF; d) serious peace and order condition in areas of operation and adverse economic condition led to the eventual suspension of the Projects causing huge losses. In order to prevent further damage and financial losses, the company had to lay off most of its staff and maintained only a skeletal force to secure its equipment while operations are suspended and preserve its records while awaiting better opportunities; e) unaware of the revocation order by S.E.C., [it] continued and [is] still continuing to seek business opportunities and that it subcontracted small works in the telecoms industry although this has resulted in net losses over the years, to maintain its personality and therefore, be able to tap such opportunities when they arise, particularly, since it has capabilities and track record and most importantly, a valid legislative franchise; f) [it] is now taking steps to use its Franchise with the participation of its prospective foreign partners who are prepared to invest a significant amount of foreign exchange to implement a telecom project soon; g) the lifting of the order of revocation is necessary requisite to continue its business operations, specially, in pursuing this particular opportunity of using its legislative franchise. 4 In support of its Petition, Petitioner submitted its 2007 General Information Sheet (GIS) and 2006 Audited Financial Statements. Petitioner also submitted, as proof of its continued operation, copies of the following documents: 1. Republic Act 8721 (An Act Granting the Multi-Line Construction International, Inc. a Franchise to Construct, Establish, Install, Maintain and Operate Local Exchange Network in the Philippines); 2. National Telecommunications Commission Order in NTC Case No. 2000-095 dated 27 September 2000; and 3. Memorandum of Understanding executed on 29 September 2000 between Telecommunications Office and Multi-Line Communications, Inc. Petitioner further alleges that it has no intention to violate the law and any SEC rules and regulations and henceforth, commits to comply with the rules and regulations of the Commission regarding the submission of reports. Given its tight cash flow. 5 Petitioner only made partial payment of the total penalty in the amount of Sixty-Seven Thousand Pesos (Php67,000.00), as assessed by the Company Registration and Monitoring Department (CRMD). This is evidenced by Official Receipt No. 0136596 dated 30 January 2008 in the amount of Thirteen Thousand Pesos (Php13,000.00). As proposed by Petitioner, the balance of Fifty-Four Thousand Pesos (Php54,000.00) shall be payable on a staggered basis. WHEREFORE, premises considered, the Order of the Commission dated 20 August 2003 revoking the Certificate of Registration of Multi-Line Communications, Inc. is hereby SET ASIDE. Petitioner is hereby directed to pay the remaining balance of the total assessed penalty in three (3) equal monthly installments of Eighteen Thousand Pesos (Php18,000.00) payable within the 1st, 2nd, and 3rd months from date of receipt of this Order. Also, Petitioner is hereby directed to submit a Mayor's Permit for 2008 within thirty (30) days from date of receipt of this Order. Failure on the part of Petitioner to comply with any of the above directives shall cause the recall of the instant Order. Let a copy of this Order be furnished the Company Registration and Monitoring Department (CRMD) and the Economic Research and Information Department (ERID) of this Commission for their appropriate action. SO ORDERED. Mandaluyong City. April 22, 2008. (SGD.) FE B. BARIN Chairperson (SGD.) MA. JUANITA E. CUETO Commissioner (SGD.) JESUS ENRIQUE G. MARTINEZ Commissioner (SGD.) RAUL J. PALABRICA Commissioner (SGD.) THADDEUS E. VENTURANZA Commissioner Footnotes 1. Certificate of Registration of Petitioner. 2. Amended Articles of Incorporation of Petitioner, Second Article. 3. Amended Articles of Incorporation of Petitioner, Third Article. 4. Petition, paragraph 3. 5. Letter dated 25 January 2008 of Mr. Venancio C. Gabriel, President of Petitioner, to Atty. Benito Cataran, Director of the CRMD.