Guidelines on Nationalized Industries
The Supreme Court recently upheld the constitutionality of SEC Memorandum Circular No. 8, Series of 2013. The salient points of said Memorandum Circular are as follows:
a. The covered corporations are those involved in areas of activities or enterprises specifically reserved, wholly or partly, to Philippine Nationals by the Constitution, the Foreign Investments Act, and other existing laws.
b. All covered corporations shall, at all times, observe the constitutional or statutory ownership requirement.
c. The required percentage of Filipino ownership must be met in both (a) the total number of outstanding shares of stock entitled to vote in the election of directors, and (b) the total number of outstanding shares of stock, whether or not entitled to vote in the election of directors.
d. Corporate Secretaries of covered corporations are directed to monitor and observe compliance thereto. The Corporate Secretary may not delegate this responsibility without an express authority from the Board of Directors or Trustees.
e. Failure to comply will be punished with the administrative sanctions provided in Section 14 of the Foreign Investments Act as amended, summarized below:
|
Juridical entity |
Fine of ½ of 1% of the paid-in capital, but not more than Php5,000,000.00 |
|
President / officials responsible |
Fine not exceeding Php200,000.00 |
|
Any person, firm, or juridical entity |
Forfeiture of all benefits granted under the Foreign Investments Act as amended |