PNCC: Rising GOCC Phoenix-8

UNDER the contested Compromise Agreement between Radstock and PNCC reducing the latter’s liability on the Marubeni Loans from P17 billion to only P6.185 billion, how was PNCC to satisfy the same?

In two (2) ways: one, part of the payment would be PNCC’s TOLL FEES COLLECTION; and two, PNCC, in a payment mode legally termed as dacion en pago (literally, exchange of goods/property for money indebtedness), PNCC will assign to a nominee to be later named by Radstock several prime properties that PNCC owns.

Note that this Com-promise Agreement had been recommended by COA for approval by the Court.

For nationalist Luis Sison, stopping this plun-der of PNCC resources was, indeed, a task that demanded unflinching resolve!

Hence, his filing of his derivative suit against PNCC.

Here’s how the Supreme Court resolved the now-landmark Radstock cases:

1. On COA’s prior recommendation for approval of the Compromise Agreement by the Court of Appeals, the SC held that such recommendation had no legal basis. Under the law (Executive Order No. 292 or the Administrative Code of 1987, COA can recommend the approval of a compromise agreement entered into by any GOCC only if the amount involved is P10,000 up to P100,000. If the amount involved exceeds P100,000.00, COA and the President shall Jointly recommend its approval to Congress. Therefore, Congress ALONE has the power to compromise the P6.185 billion purported liability of PNCC to Radstock, for the Marubeni Loans.
2. On the argue of the then members of respondent PNCC Board that PNCC was an “autonomous entity” established under the Corporation Code of the Philippines and therefore, its Board of Directors can enter into a compromise agreement without interference from any other supervising/high government office, the SC held that PNCC is a government agency UNDER Sec-tion 2 of the Introductory Provisions of EO 292.
The High Court firmly stressed:  “The govern-ent nominees in the PNCC Board are  Public Officers, subject to the Anti-Graft and Corrupt Practices Act, accountable to the government and the Filipino  people. To hold that a corporation, incorporated under the Corporation Code, despite its being 90.3% owned by the Government, is an “autonomous entity” that  could solely though its Board of Directors com-promise, and transfer ownership of all or substantially all its assets to a private third party without the approval required under the Administrative Code of 1987, is to invite the plunder of all such government corporations.”
3. On the contention that PNCC is isolated from COA audit/post-audit, the High Court intoned that COA is not, under Art. IX-D, Section 2 of the Constitution.  The criterion on the exercise of COA’s audit jurisdiction depends on the government’s ownership or control of a corporation.
The nature of the corporation, whether it is private, quasi-public or public is immaterial. (To be continued)

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