Minister Jaime C. Laya

December 6, 1985 Minister Jaime C. Laya Minister of Education, Culture and Sports Manila Dear Minister Laya: This relates to your letter, dated September 30, 1985, referring to this Commission for appropriate action the letter of Atty. A.G. Gatmaitan, dated September 9, 1985, (with enclosures) affecting the Philippine School of Business Administration (PSBA). Atty. Gatmaitan, in behalf of his client Atty. Rufino Tan, alleges in his letter that an audit and examination of the books and records of PSBA disclosed a clear design perpetrated by the officers and directors of said school to dissipate corporate funds, notwithstanding the pendency of criminal complaints filed against them. Due to the nature and seriousness of the offense charged, and the rate at which corporate funds are allegedly converted to personal use and benefit by PSBA's officers and directors, it was requested among others, that after verification of the amounts taken from the trust funds, as may be confirmed by the COA, a management committee be appointed to preserve the assets of the school until the cases against such officers and directors of the school shall have been settled or divided. Anent thereto, your attention is invited to the provisions of Section 6, subparagraph (d) of PD 902-A, as amended by PD 1799, quoted hereunder: "SECTION 6. In order to effectively exercise such jurisdiction, the Commission shall possess the following powers: xxx xxx xxx d) To create and appoint a management committee, board, or body upon petition or motu proprio to undertake the management of corporations, partnerships or other associations not supervised or regulated by other government agencies in appropriate cases when there is imminent danger of dissipation, loss, wastage or destruction of assets or other properties or paralization of business operations , of such corporation or entities which may be prejudicial to the interest of monitory stockholders, parties-litigants or the general public: provided , further , that the Commission may create or appoint a management committee, board or body to undertake the management of corporations, partnerships or other associations, supervised or regulated by other government agencies, such as banks and insurance companies, upon the request of the government agency concerned ." (emphasis supplied) Education institution are supervised and regulated by the Ministry of Education , Culture and Sports, hence, the Commission cannot, upon petition or motu proprio, create and appoint a management committee to preserve the assets of PSBA without the corresponding request from your Ministry as required by Section 6 of P.D. 902-A, as amended by P.D. 1799. It would appear from your letter that you are merely referring to the Commission the letter of Atty. Gatmaitan dated September 9, 1985 for appropriate action, pursuant to Section 143 of the Corporation Code in relation to Section 30 and Section 147 at the Code Section 143 thereof speaks of the rule-making power of the Commission, Section 30 speaks of the compensation of directors while Section 143 relates to the confidential nature of examination reports conducted by the Commission. Your said letter therefore, appear short of the legal requisite imposed by Section 6 (d) of P.D. 902-A, as amended by P.D. 1799. Meanwhile, please be advised that several complaints involving the same parties-litigants of PSBA are under investigation with this Commission. Some of the causes of actions being litigated to the allegations contained in the letter of Atty. Gatmaitan. Please be advised accordingly. Very truly yours, (SGD.) MANUEL G. ABELLO Chairman