Mr. Robert S. Sehwani

March 5, 1992 Mr. Robert S. Sehwani Filipino-Indian Chamber of Commerce (Phil.),Inc. Suite 501 Campos Rueda & Sons Bldg. 101 Urban Avenue, Makati, Metro Manila S i r : This refers to your letter of March 3, 1992 requesting interpretation of the application of the pertinent provisions of the Amended By-Laws of the Filipino-Indian Chamber of Commerce of the Philippines, Incorporated relative to the election of the Board of Directors. As stated, the Corporation received only nine (9) nominations sufficient to conduct the election of the Board by "acclamation" pursuant to Article IX Section 4 (b) of the Corporation's amended by-laws quoted hereunder: "SECTION 4. Procedure of Election : xxx xxx xxx (b) Election for directors shall be held upon nomination and acceptance of at least NINE (9) candidates from the list of qualified active members; Provided, however, that if after the lapse of the period of submission of nominations and the minimum number of nominees has not been achieved, the period of submission of nominees shall be extended for another One (1) week. After the expiration of the extended period of submission of nominations, the nominations and acceptance of at least Nine (9) candidates shall be sufficient for their election by acclamation .If there will be more than nine candidates, elections will be held in accordance with this By-Laws." (Emphasis supplied) It is your view that (1) the election by "acclamation" may be done with no formal ballots, and the Committee on Elections decided to have the acclamation done by means of show of hands, (2) that the acclamation of each candidate should be with the approving vote of the majority or 50% plus 1 of the total qualified members present, and that is, if a quorum has been established, and (3) each candidate should be present during election meeting and any absent candidate shall be disqualified, as stated in Article IX, Section 3(f) and 3(j) of your Amended By-Laws quoted hereunder. "SECTION 3. Qualifications : xxx xxx xxx (f) A qualified candidate must be physically present during election meeting before the casting of ballots and any vote for absentee candidate shall be considered as a stray vote and shall not be included in the official count. (Emphasis supplied) xxx xxx xxx (j) Any qualified candidate for the members of the Board of Directors who has been duly nominated and seconded and has accepted the nomination in writing shall not be allowed to withdraw after such nomination has been approved by the Committee on Election. In case he insists on withdrawing or in the event that he fails to appear during the election meeting, he shall be disqualified from running in the election for the position of members of the Board of Directors for one term of two years." (Emphasis supplied) However, the above interpretation is being contested. Hence, your present request for clarification. The pertinent provision of the Corporation Code states: "SECTION 24. Election of directors or trustees . At all elections of directors or trustees, there must be present, either in person or by representative authorized to act by written proxy, the owners of the majority of the outstanding capital stock, or if there be no capital stock, a majority of the members entitled to vote. The election must be by ballot if requested by any voting stockholder or member .In stock corporations, every stockholder entitled to vote shall have the right to vote in person or by proxy the number of shares of stock standing, at the time fixed in the by-laws, in his own name on the stock books of the corporation, or where the by-laws are silent, at the time of the election; and said stockholder may vote such number of shares for as many persons as there are directors to be elected or he may cumulate said shares and give one candidate as many votes as the number of directors to be elected multiplied by the number of his shares shall equal, or he may distribute them on the same principle among as many candidates as he shall see fit: Provided, That the total number of votes cast by him shall not exceed the number of shares owned by him as shown in the books of the corporation multiplied by the whole number of directors to be elected: Provided, however, That no delinquent stock shall be voted. Unless otherwise provided in the articles of incorporation or in the by-laws, members of corporations which have no capital stock may cast as many votes as there are trustees to be elected but may not cast more than one vote for one candidate. Candidates receiving the highest number of votes shall be declared elected .Any meeting of the stockholders or members called for an election may adjourn from day to day or from time to time but not sine die or indefinitely if, for any reason, no election is held, or if there are not present or represented by proxy, at the meeting, the owners of a majority of the outstanding capital stock, or if there be no capital stock, a majority of the members entitled to vote." (Emphasis supplied) The above provision requires voting to be done by ballot only if requested by a member. Thus, if there is no such request, the voting may be done by acclamation as provided in your by-laws. While the Corporation Code requires the presence of at least a majority of the members for the election of the Board, it does not require such number of votes for one to be declared elected. Under the aforecited provision, the candidates receiving the highest number of votes shall be declared elected. The requirement in the by-laws, that the candidate should be present during the election and any absent candidate shall be disqualified is in accordance with Section 47 of the Corporation Code quoted hereunder. "SECTION 47. Contents of by laws . Subject to the provisions of the Constitution, this Code, other special laws, and the articles of incorporation, a private corporation may provide in its by-laws for: xxx xxx xxx 5. The qualifications ,duties and compensation of directors or trustees, officers and employees; ..." (Emphasis supplied) Please be advised accordingly. Very truly yours, (SGD.) ROSARIO N. LOPEZ Chairman