Mr. Cecilio L. Gabiana

December 29, 1994 Mr. Cecilio L. Gabiana PNR Homeowners Association of Kalookan, Inc. 274 c/o Gabiana's Store, Former MMTC Terminal PNR Compound (Fronting U.E.), Kalookan City S i r : This refers to your letter of August 23, 1994 requesting clarification on whether the Manila Electric company (MERALCO) is a private corporation or government-owned or controlled corporation. Section 2 of P.D. 2029 defines "government-owned or controlled corporation " as follows: "SECTION 2. Definition . A government-owned or controlled corporation is a stock or non-stock corporation whether performing governmental or proprietary function which is directly chartered by special law or if organized under the general corporation law is owned or controlled by the government directly, or indirectly through a parent corporation or subsidiary corporation, to then extent of at least majority of its outstanding capital stock or of its outstanding voting capital stock . Provided that a corporation organized under the general corporation law under private ownership at least majority of the shares of stock of which were conveyed to a government corporation in satisfaction of debts incurred with a government financial institution, whether by foreclosure or otherwise, or a subsidiary corporation of a government corporation organized exclusively to own and manage, or lease or operate specific physical assets acquired by a government financial institution in satisfaction of debts incurred therewith, and which in any case by enunciated policy of the government is required to be dispose of to private ownership within a specified period of time, shall not be considered a government-owned or controlled corporation before such disposition and even if the ownership or control thereof subsequently transferred to another government-owned or controlled corporation. . . . ." (Emphasis supplied) Records show that the MERALCO is domestic corporation registered pursuant to the provision of Acts of the Philippine Commission No. 1459 and Act of Philippine Legislature No. 2728 . Therefore, it appearing that subject was not organized by a special charter but under the general corporation law, it is considered private corporation. Likewise, as stated in the previous letter of the Brokers and Exchanges Department of this Commission dated May 19, 1994 in reply to your first letter-query on the matter, the stockholding of the government is only about 45% of the outstanding capital stock of the corporation as per information provided by the corporate secretary, and since it does not meet the majority ownership requirement as mandated in the above provision, it cannot be treated as a government-owned or controlled corporation. Please be advised, however that since MERALCO is listed in the Philippine Stock Exchange, its stock ownership changes everyday. To be able to give a definite information as to the present ownership of the corporation much would depend on the identities of the stockholders as appearing in its Stock and Transfer Book. The registration of ownership/transfer of shares of a corporation listed in the Philippine Stock Exchange, is a function which pertains to that of the transfer agent of the corporation. Considering that the Commission is not in possession of its Stock and Transfer Book, it cannot furnish you a definite information on its present ownership. You may, therefore directly inquire from the transfer agent of that corporation. Please be advised accordingly. prcd Very truly yours, (SGD.) FE ELOISA C. GLORIA Associate Commissioner