Atty. Redencio C. Villarivera

August 5, 2002 SEC OPINION Atty. Redencio C. Villarivera Ortega, Del Castillo, Bacorro Odulio, Calma & Carbonnel Law Offices P.O. Box 781, Manila 1099 Dear Atty. Villarivera, This refers to your letter dated July 11, 2002 requesting confirmation of your opinion that your client corporation may legally elect a foreign national as its President. Pursuant to the Anti-Dummy Law, in firms engaged in wholly or partly-nationalized activities, aliens are banned from being appointed to management positions such as president, vice-president, treasurer, auditor, etc. of said companies although they can be elected directors in proportion to their allowable participation or share in the capital of such corporation. (SEC Opinion dtd September 28, 2001, Attys. Noel and Santos citing SEC Opinion dtd July 27, 1990 ) Under the facts as stated in your letter, we disagree with your view. Wholesale trading in itself is not a nationalized activity, however, considering that the paid-in equity capital of your client corporation appears to be less than the equivalent of US$200,000, such activity under the Foreign Investment Negative List is still considered a partly-nationalized business. Hence, the prohibition under the Anti-Dummy law applies. Verily, a foreign national can not be elected as President of the corporation. Very truly yours, (SGD.) BENITO A. CATARAN Director Company Registration and Monitoring Department