MANILA - The camp of former Health Secretary Alfredo Bengzon said Monday it welcomed the findings of regulators that a rival faction seeking control of The Medical City (TMC) violated provisions of the Securities Regulation Code.
Bengzon's group has been locked in a dispute with another corporate faction led by his nephew, Jose "Eckie" Gonzales, for control of the TMC healthcare network.
Last week, a special panel formed by the Securities and Exchange Commission (SEC) said Gonzales and his foreign partners had violated 3 sections in the Securities Regulation Code.
The SEC's "formal charge" said the Gonzales group failed to notify the commission of its significant acquisition of stock in Professional Services Inc. (PSI) and TMC, which Gonzales and Bengzon have been fighting over.
The SEC also noted the Gonzales group acquired a significant percentage of PSI through a series of transactions which were concealed from the company’s Board of Directors and PSI shareholders.
This was the claim of the Bengzon group from the beginning.
The SEC said: “Through such concealment, respondents misrepresented their independence from each other to effectively subscribe to substantial shares in PSI and eventually acquired majority shares in the target company, to the prejudice of the unsuspecting stockholders, whose share value and voting power have declined.”
The SEC also noted the Gonzales group failed to execute mandatory tender offers required when a group acquires control of a company.
"We believe that the SEC resolution has sent a strong message to all investors that the laws and rules of the country regarding investments in public companies must be upheld and respected at all times," Bengzon said in a statement.
In an official statement Gonzales and his partners said they would contest the SEC’s findings.
“We emphasize that this is not a ruling and that we have been afforded 15 days to respond to the charges on these administrative matters," the group said in a statement.
They said they could prove they complied with all SEC rules.
Last Sept. 13, Gonzales' faction installed him as TMC's chairman and CEO, removing Bengzon from the company's leadership.
The Gonzales group alleged Bengzon was legally voted out of management at the Hospital for costly mistakes involving The Medical City’s expansion to Guam.
Their faction was also able to obtain an injunction from a Pasig Court to effectively stop the Bengzon group from challenging their control over the hospital.