Mr. Aquiles J. Lopez

July 27, 1988 Mr. Aquiles J. Lopez c/o Marilo Realty Development Corp. 1221 A. Mabini St.,Ermita, Manila IN RE : Manila Golf and Country Club, Inc . Sir : This refers to your letter, dated July 25, 1988, requesting the opinion of this Commission on the query posed therein. It appears that in a previous opinion, the Securities and Exchange Commission, through Commissioner Rosario N. Lopez, ruled that as regards a corporation engaged in partially nationalized activity or permitted investments under P.D. 1789 (Now: The Omnibus Investments Code of 1987), alien investors are granted proportionate representation in the board of directors. In other words, they may become directors therein in proportion to their allowable participation or share in the capital of such entities. ( SEC letter, dated April 20, 1988 , citing SEC opinion of October 3, 1983). Your query now is may foreigners be elected as executive officers of Manila Golf and Country Club, Inc .? The pertinent provision of the amended articles of incorporation of Manila Golf and Country Club, Inc. reads as follows: "SECOND. That the purposes for which the corporation is formed are to foster, promote and conduct legitimate pleasure, recreational, social, cultural and educational non-profit activities of all kinds; and in connection with the foregoing, to establish, maintain and conduct club houses or club rooms and similar facilities; to purchase, sell, lease, or otherwise acquire or dispose of such real and personal property, athletic or other equipment as may be necessary or convenient with the conduct of the affairs of the corporation ,and generally such powers as are ordinarily done, performed and exercised by social and recreational clubs and associations." (emphasis supplied). Manila Golf and Country Club, Inc. is a non-stock, non-profit corporation (Article VII, amended articles of incorporation) was organized to pursue some educational, cultural, fraternal, social or similar purposes. Incidental to the nature and object of its incorporation, it may purchase real property, establish, maintain and operate club houses and similar facilities. And while corporations with foreign equities are not allowed to engage in "restaurant" business as the same is considered "retail" business under Section 4 of the same Act, nevertheless, P.D. 714, amending Section 4(d) * of RA 1180, allows companies or associations with foreign investments to engage in restaurant business if the restaurant has a logical relation to the corporate purpose expressed in the charter. The Club is not engaged in real estate business, but like every corporation incorporated under this Code, it has the power and capacity to purchase, receive, take, grant, hold, lease, and otherwise deal with such real and personal property as the transaction of the lawful business of the corporation may reasonably and necessarily require, subject to the limitations prescribed by law and the Constitution. (Section 36, par. 7, Corporation Code). Considering that Manila Golf and Country Club, Inc. is a non-stock corporation organized to undertake recreational, social, cultural and educational non-profit activities set forth in Section 88 of the Corporation Code, said purposes cannot be read within the context of the term "partly nationalized economic activity" which would justify the banning of foreign nationals who are members of the Club from holding management or executive positions therein. cdlex Hence, your query is answered in the affirmative. Very truly yours, (SGD.) JULIO A. SULIT, JR. Chairman * Copied verbatim from documents obtained directly from the Securities and Exchange Commission .