CEMCO vs. National Life Insurance Co. G.R. No.

171815 August 7, 2007 FACTS: Union Cement Corporation (UCC), a publicly listed company, has two principal stockholders UCHC, a non listed company, and petitioner CEMCO. A majority of UCHCs stocks were owned by Bacnotan Consolidated Industries (BCI) and Atlas Cement Corporation (ACC). CEMCO holds 9% of UCHCs stocks. BCI informed the Philippine Stock Exchange that its subsidiary ACC had passed resolutions to sell to CEMCO all their stocks in UCHC. PSE sent a letter to SEC to inquire as to whether the Tender Offer Rule under the Securities Regulation Code would apply. The SEC replied that the transaction is not covered by the tender offer rule. On August 12, 2004, the sale of the stocks was consummated and closed. National Life Insurance Co. of the Philippines, a minority stockholder in UCC filed a complaint with the SEC asking the latter to declare the purchase agreement void for being violative of the tender offer rule. CEMCO file a comment to the complaint. The SEC ruled in favor of National Life Insurance and declared the transaction to be void for being in violation of the tender offer rule. CEMCO filed a petition with the Court of Appeals challenging the SECs jurisdiction on the ground that the SECs authority is purely administrative and does not extend to adjudication. The CA upheld the SECs ruling. It ruled that CEMCO is stopped in questioning the jurisdiction of the SEC. Hence, this present petition. ISSUE: Whether or not SEC has jurisdiction HELD: Yes SEC was acting pursuant to Rule 19 (13) of the Amended Implementing Rules and Regulation of the Securities Regulation Code. The forgoing rule emanates from the SECs power and authority to regulate, investigate or supervise the activities of persons to ensure compliance with the Securities Regulation Code more specifically the provision on mandatory tender offer.