Case Digest (G.R. No. 182434)
Facts:
In Sergio R. Osmeña III, et al. v. Social Security System (G.R. No. 165272, September 13, 2007), petitioners were Senator Sergio R. Osmeña III, Senators Juan M. Flavier, Rodolfo G. Biazon, Alfredo S. Lim, Jamby A.S. Madrigal, and Social Security System (SSS) members Luis F. Sison and Patricia C. Sison. They assailed two resolutions of the Social Security Commission (SSC)—Resolution No. 428 (July 14, 2004), authorizing the sale of SSS’s entire 187,847,891 shares in Equitable PCI Bank, Inc. (EPCIB) through a Swiss Challenge bidding procedure, and Resolution No. 485 (August 11, 2004), which approved the timetable and instructions to bidders. In December 2003, SSS and BDO Capital & Investment Corporation (BDO Capital) had signed a Letter-Agreement for the sale of those shares at ₱43.50 per share, followed by a draft Share Purchase Agreement (SPA). The Commission on Audit (COA) opined that stock exchange transactions “substantially comply with the general policy of public auction,” aCase Digest (G.R. No. 182434)
Facts:
- Parties and Subject Matter
- Petitioners: Senator Sergio R. Osmeña III, Senators Juan M. Flavier, Rodolfo G. Biazon, Alfredo S. Lim, Jamby A.S. Madrigal, and SSS members Luis F. Sison and Patricia C. Sison.
- Respondents: Social Security System (SSS), Social Security Commission (SSC) members, and BDO Capital & Investment Corporation.
- Subject: SSC Resolution No. 428 (July 14, 2004) approving sale of SSS’s 187,847,891 EPCIB shares via Swiss Challenge; Resolution No. 485 (August 11, 2004) fixing bidding timetable and instructions.
- Transaction Background
- December 30, 2003 Letter‐Agreement: SSS agrees to sell shares to BDO Capital at ₱43.50/share; to negotiate final SPA within 30 business days.
- Regulatory Opinions: COA Circular No. 89-296 requires public auction for GFI assets; COA opined sale “substantially complies” via stock exchange; DOJ found terms “not objectionable.”
- Invitation to Bid: Published August 23–25, 2004, Swiss Challenge bid with right of BDO to match highest offer; October 20, 2004 as bid date.
- Supervening Events:
- January 2006: BDO announces merger with EPCIB (“Merger of Equals”).
- August 31, 2006: SM-BDO Group‐led mandatory tender offer at ₱92/share for all EPCIB stock.
- May 25, 2007: SEC approves merger; EPCIB absorbed by BDO; old shares extinguished and converted at 1.80 BDO shares per EPCIB share.
Issues:
- Whether public bidding with Swiss Challenge complies with COA Circular No. 89-296 and public policy requiring competitive bidding for government assets.
- Whether petition is rendered moot and academic by the BDO-EPCIB merger and SM-BDO tender offer at a higher price.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)