PNCC: Rising GOCC Phoenix-3
PHILIPPINE National Construction Corporation’s tragic story is encapsuled in the consolidated cases of Strategic Alliance Development Corporation vs. Radstock Securities Limited and PNCC (G.R. No. 178158) and Luis Sison vs. PNCC and Radstock Securities Limited (G.R. No. 180428) decided by the Supreme Court on December 4, 2009.
With a view to attract neglected focus by national leadership on this actually still very much-beleaguered agency, this space shall serialize what it shall call “THE PNCC CAPER”, from FACTS derived from the mentioned cases and subsequent, if equally ‘shocking’ developments.
The public, the Senate Blue Ribbon Committee and the Office of the Ombudsman deserve to know.
The Senate Blue Ribbon Committee and/or the Office of the Ombudsman, thru its per-functory/motu proprio authority, should, in fact, conduct a fact-finding investigation of this incident at the PNCC and see if court action/s is/are still feasible despite the passage of time (that could constitute the defense of prescription).
After all, haling to court of GMA-era government scalawags is part of the continuing ‘Tuwid Na Landas’ crusade of the President. By the last quarter of 1982, CDCP began experiencing difficulty in paying its loans.
By then, various government financial institutions held a total of 77.48 % of CDCP’S voting equity.
Alarmed by CDCP’s precarious financial situation, government financial creditors proposed to CDCP leadership the conversion of their combined credit into equity.
Left without a choice, CDCP amended its articles of incorporation in 1983 and changed its corporate name to PNCC to reflect government’s equity investment in the company.
Most of these shares were eventually transferred to the Asset Privatization Trust (APT) under Administrativee Orders No. 14 and 54, series of 1987 and 1988, respectively.
Around that ime, too, the Presidential Commission On Good Government (PCGG) held some 13.82% of PNCC’s voting equity under a writ of se-questration, and thru the voluntary surrender of certain PNCC shares.
As at most recent reckoning, government owns 90.3% of PNCC’s equity, leaving a measly 9.70% under private ownership.
A situation that has perplexed courts (where PNCC had been invariably haled as defendant in collection suits) in determining the exact classification of PNCC as a corporate entity.
In certain cases, the Supreme Court held that PNCC continued to be a “private corporation (having been registered under the Corporation Code of the Philippines) where government has substantial equity holding.”
Yet in some other cases, the same court regarded PNCC as a GOCC (Government-Owned or -Controlled Corporation).
The distinction as to classification is important in determining the suability and liability of PNCC in suits where it is a party litigant.
This ‘technical’ problem may have been finally settled with the recent enactment into law of RA No.10149 or the GOCC Gover-nance Act of 2011.
PNCC appears to be a GOCC under paragraph 2(c) thereof which refers to it as “xxx any agency organized as a stock or non-stock corporation, vested with functions relating to public needs whether governmental or proprietary in nature, and owned by the Government of the Republic of the Philippines directly or through its instrumentalities either wholly or, where applicable as in the case of stock corporations, to the extent of at least a majority of its outstanding capitals stock xxx.”
By the first half of the year 2000, the Marubeni loans to CDCP – and now PNCC – remained unliquidated.
On October 20, 2000, the PNCC Board of Directors (“PNCC Board”) at that time, and in an unexpected and bizarre act, surprised every sane and thinking Filipino with its unpre-cedented resolution (Res. No. BD-092-2000) ADMITTING PNCC’s liability to Marubeni for P10.7 Billion as of September 30, 1999. (To be continued)