Atty. Cesar P. Manalaysay

February 27, 1981 Atty. Cesar P. Manalaysay A. Soriano Bldg.,Ayala Ave. Makati, Metro Manila Dear Atty. Manalaysay: This has reference to your letter dated December 5, 1980 relative to the effectivity of the increase in authorized capital stock of the Advanced Micro Devices (Philippines) Inc. Perusing the records or subject corporation on file with this Commission, it appears that at a special meeting held on January 16, 1980, the stockholders representing more than two-thirds (2/3) of the outstanding capital stock approved the increase in authorized capital stock from P5,500,000.00 to P33,500,000.00; that out of the increase of P28,000,000.00 in the capital stock, shares worth P5,624,000.00 have been subscribed and fully paid by way of stock dividend declared to all stockholders of record as of January 16, 1980 out of the company's retained earnings; and that it was only on October 17, 1980 that the SEC approved the said increase as evidenced by the certificate of Filing of Certificate of Increase of Capital Stock and the Certificate of Filing of Amended Articles of Incorporation (SEC Reg. No. 69355). You also alleged in your letter that earlier, or on March 28, 1980, the Board of Investments (BOI) approved the application of said corporation for expansion reinvestment allowance pursuant to Section 7(h) of R.A. 5186, as amended, in the amount of P4,218,000.00 which is equivalent to 75% of P5,624,000.00 stock dividend declaration; that the said BOI approval however contained various conditions, the most pertinent of which is that the approval by the SEC of the application for increase in the authorized capital stock should come on or before March 30, 1980 and that the BOI refused to issue a certificate of authority on the expansion reinvestment because the SEC issued the certificate of filing of certificate of increase of capital stock only on October 17, 1980. In the light of the foregoing facts, this Commission is of the opinion that the approval of the Certificate of Increase of Capital Stock by this Office on October 17, 1980 retroacts or relates back to the date of the approval of the increase of capital stock by the requisite stockholders vote on January 16, 1980, thereby giving effect or validating the approval of the stock dividend declaration by the stockholders on same date (Cf Opinion dated August, 12, 1980) Moreover, it is evident that Section 17 of the Corporation Law (Act 1459, as amended) applies because the corporate acts transpired prior to the effectivity on May 1, 1980 of the New Corporation Code (Batas Pambansa Blg. 68), which emphatically provides for a new provision in Section 38 thereof, i.e., "From and after approval by the Securities and Exchange Commission of its certificate of filing, the capital stock shall stand increased or decreased . . . ." Consequently, your corporation is deemed to have complied with the condition imposed by the BOI. Please be advised accordingly. Very truly yours, (SGD.) ROSARIO N. LOPEZ Director Corporate and Legal Department