Benguet Management Corporation

January 21, 1991 Benguet Management Corporation 391 J. Rizal St., Bo. Mamayan 1501 Mandaluyong, Metro Manila Attention : Mr . Alberto M . Leao (Treasurer & Assistant Vice-President-Finance) Gentlemen : This refers to your letter dated November 6, 1990, requesting that the foreign paid-up capital of the proposed joint venture corporation you are going to put up be allowed to be deposited in a yen account with any Central Bank authorized agent bank and that its foreign stockholder be allowed to remit capital in the form of equipment. As stated, you are currently in the process of organizing a joint venture company for the manufacture of corrosion-resistant austenitic stainless steel (CRASS) castings and centrifugal pumps made of CRASS castings. The proposed joint venture corporation, Ebara Benguet, Inc., (EBI), will be owned 60% by Ebara Benguet Corporation of Japan (Ebara) and 40% by Benguet Management Corporation (BMC). EBI will be developed at a cost of P206 million and shall be financed through equity and loan. Given the current scarcity of foreign exchange availability for importation of equipment, you would like to request for approval to allow EBI to keep the foreign capital it will receive from Ebara in yen deposit account with the Philippine Central Bank authorized agent bank and also to allow the foreign stockholder to remit capital to EBI in the form of equipment. Anent thereto, please be advised that the same may be allowed, provided the following are submitted: 1. Bank Certificate accomplished in accordance with the prescribed form showing the peso conversion amount; 2. Proof of remittance of the foreign capital to the Philippines; and 3. Central Bank approval of the scheme. When payment to subscription is in the form of equipment the following shall be submitted: 1. Appraisal report of the value of the equipment together with the invoice or importation documents; and 2. Deed of assignment of the property in favor of the assignee corporation. Likewise, since in the above-mentioned proposed corporation there are foreign stockholders, it can engage only in "wholesale" business. Under RA 1180, otherwise known as the "Retail Trade Nationalization Law", corporations whose capital are not owned wholly by citizens of the Philippines are barred from engaging in "retail" business. Please be advised accordingly. Very truly yours, (SGD.) RODOLFO L. SAMARISTA Associate Commissioner