Messrs. Andres M. Acosta

April 5, 1982 Messrs. Andres M. Acosta and Vicente P. Salvador Northeastern College, Inc. Santiago, Isabela Gentlemen: This has reference to your letter dated February 3, 1982 questioning the operation of the Northeastern College, Inc. and the tenure of its board of directors. It appears from the allegations in your letter that during the 1979 annual stockholders' meeting, a resolution was passed to allow "the stocks of the late Mr. Leon Cadawas and that of the late Mrs. Emeteria B. Pascual . . . to participate in the election by their corresponding individual heirs, and to request them to settle their estate taxes and the corresponding penalties within this fiscal year to resolve the issue once and for all;" that no election for the board was held during the 1980 annual stockholders' meeting because of the alleged lack of quorum due to the alleged failure of the abovementioned heirs to settle the estate taxes and/or surcharges; that there was also no election for the board in 1981 because no call for an annual meeting was made; and that the 1981-1982 school year is almost ended without any election. You are therefore interested to know (1) Whether or not the SEC has the power to order a corporation and/or its hold-over officers to call a stockholders' meeting for the purpose of electing the board of directors; and (2) Whether or not actuations of the hold-over officers are valid/legal for oil purposes until their successors will be elected accordingly. Relative to your query on the power of the SEC to order the Northeastern College, Inc. or any corporation for that matter to hold an annual election of stockholders for the election of the board of directors, please be informed that the SEC possesses such power under Presidential Decree No. 902-A, to wit: SECTION 6. In order to effectively exercise such jurisdiction, the Commission shall possess the following powers: xxx xxx xxx (c) To compel the officers of any corporation or association registered by it to call meetings of stockholders or members thereof under its supervision. xxx xxx xxx However, the SEC does not order an election motu proprio or by way of an opinion, so that you have to file a complaint with our Securities Investigation and Clearing Department (SICD) against the hold-over officers and/or the corporation. Regarding your second query, please be informed also that the same is a justiciable issue , which should be ventilated as an issue in any case that you shall have filed with the SICD. For this reason, the SEC will have to refrain from answering the same, so that it will not be estopped to decide on said issue in the future. Please be guided accordingly. Very truly yours, (SGD.) MANUEL G. ABELLO Chairman