Case Digest (G.R. No. 125469)
Facts:
Philippine Stock Exchange, Inc. v. Court of Appeals, Securities and Exchange Commission and Puerto Azul Land, Inc., G.R. No. 125469, October 27, 1997, Supreme Court Second Division, Torres, Jr., J., writing for the Court.The petitioner is Philippine Stock Exchange, Inc. (PSE); respondents are the Securities and Exchange Commission (SEC), the Court of Appeals (CA) (respondent by virtue of its judgment), and Puerto Azul Land, Inc. (PALI); the Presidential Commission on Good Government (PCGG) later sought intervention. The dispute arose from the PSE's denial of PALI's application to list its shares and the SEC's subsequent order directing PSE to list PALI.
In January 1995 the SEC issued PALI a Permit to Sell to the public. PALI applied to list its shares on the PSE, submitting required documents. On February 8, 1996 the PSE Listing Committee recommended approval, but before final action the heirs of President Marcos sent a letter asserting ownership claims over properties PALI claimed as assets and asked that listing be deferred. PALI responded that some resort facilities were not its assets and that a major shareholder held only 1.20% interest; the Marcoses broadened their claim. The PSE sought the PCGG's comment and learned on March 4, 1996 that a Temporary Restraining Order (TRO) issued by the RTC of Pasig enjoined the Marcoses from interfering with the PSE's consideration of the IPO.
On March 27, 1996 the PSE Board of Governors voted to reject PALI's listing application because of serious ownership and title claims that, in its view, affected suitability for listing. PALI petitioned the SEC on April 11, 1996 to review PSE's action under the SEC's supervisory powers (citing P.D. No. 902‑A, Sec. 6(j)). The SEC directed PSE to comment and, after submissions, on April 24, 1996 issued an order setting aside PSE's denial and directing that PALI be listed immediately, subject to the Exchange's authority to require further disclosure. PSE's motion for reconsideration was denied by the SEC on May 9, 1996, which also ordered fuller disclosure by PALI.
Dissatisfied, PSE filed a Petition for Review with the Court of Appeals (May 17, 1996) seeking injunctive relief and arguing that the SEC lacked authority to order listing, that PSE's denial was not arbitrary, that SEC policy of full disclosure could not supplant PSE's discretion, and that some PALI properties were sequestered or within military/forest reservations. The CA, in a June 27, 1996 resolution, dismissed PSE's petition and affirmed the SEC, holding the SEC had plenary supervisory authority over exchanges under P.D. No. 902‑A and the Revised Securities Act and that PALI complied with listing requirements; the CA found PSE's denial ar...(Pro-only)
Issues:
- Does the Securities and Exchange Commission have jurisdiction and authority to review and order a stock exchange to list securities despite the exchange's adverse decision?
- Did the Philippine Stock Exchange act arbitrarily or in bad faith in denying Puerto Azul Land, Inc.'s application for listing?
- Was PALI's application and disclosure sufficient under the Revised Securities Act and SEC polic...(Pro-only)
Ruling:
- (Pro-only)
Ratio:
- (Pro-only)
Doctrine:
- (Pro-only)