Director R.P. Lirio

July 27, 1987 Director R.P. Lirio SES Department IV Central Bank of the Philippines Roxas Blvd., Manila Sir : This has reference to your letter, dated July 20, 1987, inquiring about the veracity of a press release on the July 17, 1987 issue of Bulletin Today, directing attention to Consolidated Robina Capital Corporation as an investment house. LexLib The records of this Commission show that Consolidated Robina Capital Corporation was registered with this Commission on June 11, 1987, to undertake the following primary purpose: "To engage in the business of investment by way of purchase or acquisition of any share or shares or interest in corporation, associations, partnership, banks or any other business entity, and generally deal in and with all kinds of shares of stock, voting trust certificates, bonds, mortgage, debentures, trust receipts, notes and other securities, obligations, contracts, certificates of interest, choses in action and evidence of indebtedness in general of any corporation, association, partnership, banks or any other business entity for its own account without necessarily engaging as stock brokers or dealers of securities ; to manage any business, firm or corporation or otherwise act as managers of said business, firm or corporation, as such, or as holding or management corporation thereof, except the management of funds, securities, portfolios and other similar assets of any firm or entity ." (emphasis supplied). Consolidated Robina Capital Corporation is not authorized under its articles of incorporation to engage in the underwriting of securities of other corporations. It is precisely provided in its purpose clause that it cannot engage as a stock broker or dealer in securities, neither can it act as portfolio managers, which are some of the express powers of an investment house under Section 7 of P.D. 129. Technical words are to be taken in their technical sense. Hence, subject corporation cannot be classified as an "investment house." The Commission categorizes Consolidated Robina Capital Corporation as a " holding company ". A holding company has been aptly defined as "a corporation organized to hold the stock of another or other corporations." (6A Fletcher Cyc. Corps., 1981 rev. vol.), sec. 2821 at 300.) As stated by the Supreme Court of United States, "the dominant characteristic of the holding company is the ownership of securities by which it is possible to control or substantially to influence the policies and management of one or more operating companies in a particular field of enterprise". (North American Co. v. Securities & Exchange Commission, 327 US 686, 90 L Ed. 945, 66 S. Ct. 785, 794, cited in Fletcher Supra.) In another case, the court ruled that "a 'holding corporation' cannot be properly defined as one whose designed purpose and whose activities consist in holding the stocks and bonds of other corporations for the purpose of controlling the affairs of those corporations, this may or may not be true in the particular case, no control may be desired or exercised." (Pullman Palace Case Co. v. Missouri P.R. Co., 115 US 587, 597, 29 L Ed. 499, 6 S. Ct. 194, cited in Fletcher, Supra). Its essential feature is that it holds stock. (Fletcher, sec. 2821, citing Noyes, Inter-corporate Relations, (2nd ed.), sec. 285. Please be advised accordingly. Very truly yours, (SGD.) JULIO A. SULIT, JR. Chairman