PNCC: Rising GOCC Phoenix-11
It held that Radstock, a “mysterious” foreign corporation with no known stockholders and whose nationalities are also unknown, appears to have been registered in the British Virgin Islands, with offices at Central Hong Kong.
Being a foreign corporation, Radstock is NOT qua-lified to own lands in the Philippines under Section 7, in relation to Section 3, Article III of the Constitution.
Neither can Radstock own the “rights” to ownership of lands. Accordingly, and consistent with Article 1459 of the Civil Code, Radstock cannot assign lands
which it does not and cannot have.
7. PNCC’s assigning such lands/properties to a Radstock nominee also constitutes blatant circumvention of the constitutional prohibition on foreign corporations to own lands in the Philippines.
8. Further bedeviling the indicated Compromise Agreement is the absence of PUBLIC BIDDING anent the PNCC properties supposed to have been dacioned to a Radstock nominee. This, the High Court intoned, is counter to the express requirement of public bidding for the disposal of government properties under Section 79 of PD 1445.
9. In fine, the Supreme Court held that the said Compromise Agreement violates the Civil Code provisions on concurrence and preference of credits.
At the time the indicated Compromise Agreement was entered into, Radstock was only one of PNCC’s many creditors.
In giving priority to Radstock, PNCC is in FRAUD of its other creditors.
Among them is Asiavest, Inc.
which is a judgment creditor of PNCC and has already secured a writ of execution against it in a separate collection case against it that also reached the Supreme Court (G.R. No. 110283).
Another huge creditor of PNCC is the National Government itself which it owes a whopping P36 Billion in unpaid taxes and fees.
Being already insolvent at the time the said Compromise Agreement was inked, its unpaid indebtedness to the National Government enjoy preference in payment over its Radstock debt, pursuant to Articles 2241, 2242 and 2243 of the Civil Code.
With the said Compromise Agreement, plus a huge negative networth (at that time) of P14 Billion, based on COA’s 2006 Audit Report of PNCC’s financial position, how, wondered the Supreme Court, could PNCC pay its other creditors?
The High Court further ex-plained that while the Corporation Code allows the
transfer of all or substantially all of the assets of a corporation, such transfer should not prejudice the other creditors of the assignor corporation.
Otherwise, such transfer/conveyance would be fraudulent and, thus, violative of Article 1387 of the Civil Code. (To be continued)