In re General Bank and Trust Co.

December 24, 2008 SEC EN BANC CASE NO. 08-08-0498 IN THE MATTER OF GENERAL BANK AND TRUST COMPANY SEC REGISTRATION NO. 0000023615 FOR : Setting Aside the Order of Revocation O R D E R Petitioner, GENERAL BANK AND TRUST COMPANY, is a stock corporation, registered with the Commission on 22 August 1963, under SEC Registration No. 0000023615, with principal office in the City of Manila, as stated in its Articles of Incorporation. CAaSHI On 26 May 2003, its Certificate of Registration was revoked by the Commission, by virtue of SEC Order dated 22 April 2003, published on 25 April 2003 in the Philippine Daily Inquirer, for non-filing of reports for the years 1997 to 2002. Petitioner now prays for the setting aside of the Order of Revocation dated 22 April 2003, on the following grounds: 1. that in its Resolution No. 675, the Monetary Bank of the Central Bank of the Philippines (now Bangko Sentral ng Pilipinas) forbid * Petitioner to do business on 25 March 1977 and on 29 March 1977, in its Resolution No. 677, ordered the liquidation of the Petitioner; TSAHIa 2. that despite its liquidation and failure to operate, the Petitioner was still considered existing as a corporation per letter dated 26 October 1977 of Director Feliciano A. Arban of the then Examiners and Appraisers Department of the Commission; 3. that to protect the rights of the Petitioner and its stockholders, it filed a Petition with Certiorari with the Supreme Court (SC). In support of its Petition, Petitioner submitted the following documents: 1. Directors' Certificate dated 08 August 2008, certifying that at the organizational meeting of the Directors held on 03 November 2005 in Pasig, Metro Manila, at which a quorum was present, the resolution allowing the filing of the Petition to Set Aside Order of Revocation was unanimously approved; 2. 2007 Audited Balance Sheet (BS), received by the Commission on 21 August 2008; 3. 2008 General Information Sheet (GIS), received by the Commission on 03 April 2008; CAHaST 4. Affidavit dated 03 April 2008, signed by Mr. Rodolfo A. Millare, Assistant Corporate Secretary of the Petitioner, certifying that it has no stockholders' meeting on 26 March 2008 and that it has no operation since 25 March 1977 up to the present; 5. Affidavit dated 04 January 2008, signed by Mr. Aderito Z. Yujuico, Chairman of the Petitioner, certifying that it has no operation since it was forbidden to do business on 25 March 1977 by the Monetary Board of the Central Bank of the Philippines and that it was subsequently ordered liquidated; 6. Affidavit dated 20 February 2006, signed by Mr. Aderito Z. Yujuico, Chairman of the Petitioner, certifying that the latest audited Financial Statements (FS) of the Petitioner was for the year 1976; 7. Photocopy of the letter dated 26 October 1977 of Director Feliciano A. Arban, Examiners and Appraisers Department of the Commission stating that the records of the Commission do not show that the Petitioner has dissolved its corporate existence in accordance with law and that for reason mentioned in the letter, it is still existing and therefore covered by the rules; aIAEcD 8. a copy of the 1976 audited Financial Statements (FS), not bearing the stamp "received" by the Bureau of Internal Revenue and the Commission. Per En Banc Resolution No. 10, Series of 2007, (11 January 2007), Petitions to Lift the Order of Revocation of Certificates of Registration must be filed within three years from the date of revocation and upon the expiration of the aforesaid period, the Order of Revocation shall become final and executory unless otherwise decided by the Commission En Banc in meritorious cases. This Petition is filed after three years from the date of revocation of the Certificate of Registration of the Petitioner. The Petitioner admits that it has no operation since 25 March 1977 up to the present. Section 22 of the Corporation Code provides that continuous inoperation for a period of at least five years may be a ground for the revocation of the Certificate of Registration of a corporation. Hence, such admission only supports the revocation of the Certificate of Registration of the Petitioner. However, Petitioner alleges that it failed to operate because it was forbidden to do business on 25 March 1977 by the Monetary Board of the Central Bank of the Philippines [now Bangko Sentral ng Pilipinas (BSP)] and that it filed a case with the Supreme Court (SC) against the BSP to contest said Resolution. Granting arguendo that the reason why Petitioner failed to operate is because of this Resolution, the determination on whether such resolution is proper is best left to the discretion of the SC. The only issue to be resolved is whether Petitioner is excused from non-filing of reports. STaIHc One of the grounds relied upon by the Petitioner is that based on Document No. 7, the Petitioner is still existing as a corporation. It is noteworthy that such letter was dated 26 October 1977. Further, said letter was in reply to the letter of the Petitioner inquiring if it is covered by the SEC Rules requiring all corporations to register their Stock and Transfer Book (STB). Aptly, then Director Arban informed Petitioner that considering it has no application for dissolution, it is still existing as a corporation and is, therefore, covered by the SEC rules. However, such letter did not, in any way, excuse the Petitioner from complying with the Commission's rules and regulations. Far from excusing Petitioner from complying with the SEC rules and regulations, said letter is notice to the Petition to comply with the SEC rules and regulations ( e.g. , registration of its STB and submission of GIS and FS). This, the Petitioner failed to do. It is for this reason that the Certificate of Registration of Petitioner was revoked by the Commission on 26 May 2003, by virtue of SEC Order dated 22 April 2003, because per the Commission's database, the subject corporation failed to file any reports for the years 1997 to 2002. Petitioner also alleges that to protect its rights and of its stockholders, it filed a Petition with Certiorari with the SC. Assuming that such case is still pending with the SC (Petitioner did not attach a copy of such Petition with Certiorari and Petitioner likewise did not indicate in its Petition that there is already a decision in the case that it filed), we cannot set aside the revocation of the Certificate of Registration of Petitioner based on a chance that Petitioner may be allowed to operate if such will be the decision of the SC. For the Commission to set aside the revocation of the Certificate of Registration of a corporation, there should be no hindrance for the operation of a corporation. Otherwise, the setting aside of the revocation will be nugatory. TAIDHa Further, it bears stressing that the audited Balance Sheet of the Petitioner is not compliant with the Commission's rules considering that the same is not an audited FS; it has no notes; it has no Statement of Management's Responsibility; and was not received by the Bureau of Internal Revenue. Also, evaluation of the submitted documents of the Petitioner vis-a-vis the records on file with the Commission shows that the Petitioner violated Section 16 of the Code by effecting a change in its principal office (#116 Herrera St., Legaspi Village, Makati City per its 2008 GIS) without properly amending its Articles of Incorporation (which states the City of Manila). WHEREFORE, premises considered, the revocation of the Certificate of Registration of the GENERAL BANK AND TRUST COMPANY is hereby AFFIRMED. SO ORDERED. Mandaluyong City, December 24, 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