Mr. Manuel R. de Jesus

March 8, 1990 Mr. Manuel R. de Jesus 11 Los Tamaraos Drive Sunset Village, Tambo Paraaque, Metro Manila S i r : This refers to your letter dated December 18, 1989 requesting clarification relative to the SEC letter, dated September 12, 1989, addressed to Mr. Jose P. Llopis , which states that with the consent of the corporation, the entire subscription, although not yet fully paid, may be transferred. You are inquiring whether the consent of the stockholders by a majority vote is sufficient to effect in the corporate books the transfer of subscription not fully paid to several transferees under the following circumstances : a. The present transferor acquired the said entire subscription from a previous stockholder who did not fully pay his entire subscription; b. The transfer of the said entire subscription, although not yet fully paid, from the previous stockholder to the present transferor was approved by a majority of the previous stockholders; c. The present transferor has not also fully paid the said entire subscription sought to be transferred to several transferees which transfer, however, was approved by a majority of the present stockholders. Further to the above-mentioned letter of the SEC, please be advised that the Commission only allows the recording in the corporate books transfer of subscription not fully paid to a single transferee, provided that the transfer is approved by the board of directors and accompanied by an affidavit of assumption of the unpaid balance by the transferee. The reason for not allowing the transfer of subscription not fully paid to several transferees is because of the indivisible nature of subscription. It would be difficult to determine whether or not partial payments made by the transferor should be applied as full payment for the corresponding number of stocks, the par value of each of which is covered by such payment, or as proportional payment to each and all of the entire number of subscribed shares. Consequently, as stated it would be difficult to determine the unpaid balance to be assumed by each transferee. In the light of the foregoing, the original transfer of the entire subscription to the present transferor may be allowed subject to the above conditions. However, with respect to the second transfer to several transferees, the same is not transferable in the corporate books although it may be valid as between the transferee and the transferors. Please be advised accordingly. Very truly yours, (SGD.) RODOLFO L. SAMARISTA Associate Commissioner