SC orders court to try firm controlled by Marcos cronies
By Leila Salaverria
Philippine Daily Inquirer
First Posted 23:29:00 05/11/2008
MANILA, Philippines--The Supreme Court has directed the Sandiganbayan to resume trial against a company believed to be controlled by cronies of former president Ferdinand Marcos that wrested control of the sequestered Domestic Satellite Philippines Inc. (Domsat).
The high court overturned the Sandiganbayan's order dismissing the suit filed by the Presidential Commission on Good Government and Domsat against Investa Corporation for lack of jurisdiction.
The tribunal said that since the case concerned sequestered assets alleged to be part of the ill-gotten wealth of the late dictator Marcos, it fell under the Sandiganbayan's jurisdiction.
The anti-graft court in 1998 dismissed the case, saying the allegations of fraud that led to the dilution of government shares concerned intracorporate disputes and should be handled by the Securities and Exchange Commission.
Domsat was sequestered after the fall of the Marcos government in 1986, with the PCGG taking over the shares handled by alleged Marcos cronies Roberto Benedicto, Jose Africa and Manuel Nieto. The government-sequestered share was initially 32.79 percent.
In 1989, however, Domsat elected a new board of directors which the PCGG alleged to be nominees of Benedicto, Africa and Nieto. This board entered into a management contract with Investa Corporation, under which the latter would be paid the full value of Domsat shares or P1 million per semester.
Investa's ownership in Domsat then grew, and as of March 3,1998, Investa held 75 percent of Domsat shares while government-held shares fell to 15.9 percent.
The PCGG contested the management contract and accused Investa and the new set of directors of weakening the government's hold on the sequestered Domsat.
In its May 7 decision, the high court said the PCGG, as conservator of the sequestered shares, should perform its duty of protecting the sequestered properties from dissipation. They should also exercise some measure of control over the business, the high court said.
"The Sandiganbayan should now rule upon the propriety of the management contract," it said.
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