GR 128606; (December, 2000) (Digest)
G.R. No. 128606 ; December 4, 2000
Republic of the Philippines, petitioner, vs. Sandiganbayan (3rd Division), Jose L. Africa, UNIMOLCO, Roberto Benedicto, Andres Africa and Smart Communications, respondents.
FACTS
Eastern Telecommunications Philippines, Inc. (ETPI) was a sequestered corporation. A 1990 compromise agreement between the Presidential Commission on Good Government (PCGG) and Roberto Benedicto ceded 51% of ETPI shares (204,000 shares) to the government, while the remaining 49% (196,000 shares) held by Universal Molasses Corporation (UNIMOLCO) were released from sequestration. On April 24, 1996, UNIMOLCO offered to sell its 196,000 shares to ETPI itself, providing notice to the corporate secretary. Subsequently, the Sandiganbayan authorized the transfer of 204,000 shares to the government from UNIMOLCO’s holdings. Despite a PCGG resolution enjoining share sales without its consent, UNIMOLCO sold its 196,000 shares to Smart Communications, a non-stockholder, on July 24, 1996.
The Republic, through the PCGG, moved to cite the sellers in contempt and to annul the sale. It argued the sale defied the Sandiganbayan’s order for the government’s shares to come from UNIMOLCO and violated the Republic’s preemptive right under ETPI’s Articles of Incorporation. The Articles granted the corporation a 30-day first refusal right, followed by a pro-rata right for existing stockholders if the corporation declined. The Sandiganbayan denied the motion, prompting this petition.
ISSUE
Whether the Sandiganbayan erred in upholding the sale of UNIMOLCO’s ETPI shares to Smart Communications and in not recognizing the Republic’s right of first refusal.
RULING
The Supreme Court denied the petition and affirmed the Sandiganbayan. The legal logic rests on the proper application of the preemptive right clause and the conclusive nature of the Sandiganbayan’s factual findings. The Court held that the Republic failed to validly exercise its right of first refusal. The Articles of Incorporation created a specific procedure: the selling stockholder (UNIMOLCO) must first offer the shares to the corporation (ETPI). Only if ETPI refuses may the offer then be extended to other existing stockholders. The notice of sale was correctly given to ETPI’s corporate secretary on April 24, 1996. The Republic, as a stockholder, was not entitled to direct notice at that initial stage. ETPI did not exercise its corporate right, and there was no evidence the offer was subsequently transmitted to stockholders as required for the secondary right to trigger.
Furthermore, the Sandiganbayan found the Republic received actual knowledge of the offer only on August 30, 1996, after the sale to Smart was consummated. The Court emphasized that factual determinations by the Sandiganbayan are binding unless shown to be grounded on speculation or grave abuse of discretion, which was not established. The sale to an outsider (Smart) after the corporation’s right lapsed was permissible under the Articles. The claim that the sale interfered with the earlier Sandiganbayan resolution was also a factual matter already resolved against the petitioner. Thus, no legal basis existed to annul the sale.