Bankruptcy is one of the problems that arises whenever an economic crisis hits a country. Our country suffered from it in the past and there were lots of businesses that decided to close down because they can’t take the pressure and the financial lost that it has brought. It is sad because there were lots of people who were depending on their jobs in order to be able to provide for their family, were now jobless because of this. This is an article that was brought to my attention and hope you can share your opinion about it.
The Steel Corporation of the Philippines (SCP), the country’s last remaining fully integrated steel plant, which was forcible brought to corporate rehabilitation back in 2006 by Banco de Oro (BDO) upon court orders. This is possibly what we might call the death of the local steel industry in the Philippines and almost all of the country’s steel supply are now imported from other countries with substandard steel such as China.
The action for a corporate rehabilitation against SCP pushed through even though there were several appeals at the Court of Appeals and the Supreme Court. For some strange reasons, the rehab court has all of a sudden, issued an order on 19 September 2012 converting the rehabilitation proceedings into one of liquidation based on the outdated, erroneous, and speculative report of the rehab receiver. More so, this action of the rehab court being presided over by Judge Ruben Galvez of the Batangas Regional Trial Court’s Fourth Judicial Region, Branch 3 was in utter disregard of judicial courtesy and of SCP’s ’s fundamental right to due process.
The local steel industry is already in pain because while the Philippines is so rich with high grade iron ores and other minerals needed the production of steel, many local steel plants have shut down especially during the onslaught of the Asian Financial Crisis in 1997. Despite the financial challenges, SCP struggle to survive only to be placed under rehab proceedings and without any due process, be converted into one of liquidation upon the mere recommendation of the rehab receiver, whose appointment, experience and qualifications are questionable?
Isn’t it more prudent that all efforts should be focused on the rehabilitation of SCP instead of being quickly dissolved especially if the owners and investors are more than willing to save their own company? Why is it that the rehab court under Galvez is too much in a hurry to practically erase the SCP on the face of the planet?
For one, the appointed rehab receiver, Atty. Norma Singson-De Leon, based her recommendation to liquidate SCP on information which are false, grossly inaccurate and pure hearsay, and on conclusions which are erroneous, reckless, illogical, unfounded and prejudiced. She never truly intended to rehabilitate SCP but was just fishing for evidence to support her premeditated objective of liquidating SCP.
Contrary to the rehab receiver’s findings, SCP handily passed the balance sheet and cash flow tests of solvency prescribed under both the old and new law of corporate rehabilitation. Based on its audited financial statements for 2011, its total assets exceeded its total liabilities by php5.3 billion (“balance sheet test”) and its current assets exceeded its current liabilities by php2.9 billion (“cash flow test”).
It is clear that the Rehab Receiver never truly intended to rehabilitate SCP but was just fishing for evidence to support her premeditated objective of liquidating SCP.
For whatever reason, it is reeks with anomaly for a Rehab Receiver to be rushing SCP’s liquidation instead of allowing first for its rehabilitation. Besides, it is obvious that the rehab receiver is clearly unqualified for a heavy manufacturing company like SCP having had only two previous experiences for companies which are less than 10% the size of SCP. It also turned out that SCP’s rehab receiver has been discharged twice as rehab receiver by two rehab courts in the past.
Judge Galvez’s court violated the right of SCP and other interested parties to due process as he did not exert any effort to hear the side, not only of SCP, but also those of the creditors and the other interested parties before ordering its liquidation. How can Judge Galvez even issue the liquidation order against SCP on the basis of the mere say-so of an inexperienced rehab receiver, without giving all affected parties their day in court and without the implementing rules and regulations?
Why is he in a rush to liquidate a company which is the country’s last stand against the invasion of substandard and China-made steel?
While there are pending petitioned before the Supreme Court and the Court of Appeals, Judge Galvez seemed to be too over-eager to implement the recommendation of Singson-De Leon even if it means that this would pre-empt the ruling of both superior courts.
It simply ignored the doctrine of judicial courtesy which requires that lower courts must await the decision of higher courts on matters related to cases before it. Otherwise, the appeals may be rendered moot and academic, and useless, resulting in judicial anarchy. Moreso, why can’t the rehab court wait for the decisions of the higher courts as it has always done in the past instead of risking being cited in contempt?
In ordering the liquidation of SCP, the Galvez court may have committed contempt of court by preempting the pending decisions of the Court of Appeals and the Supreme Court. Disregarding the superiority of the CA and the SC as arbiters of the SCP’s case is tantamount to abuse of discretion and does not sit well with the judiciary’s earnest struggle to regain the people’s trust and confidence which was somehow eroded by the painful Corona impeachment trial.
SCP is the last fully integrated steel plant still standing in the country and it must be saved from predatory takeover attempts by those casting a moist eye on its business for their own selfish interests. Because BDO failed to take over SCP after forcibly bringing it to corporate rehabilitation, fear are rife that it now wants to do it again by using the liquidation order as an excuse to use SCP funds to selectively buy back its debts held by the other creditors to complete the takeover.
This would not only allow an easier takeover but it would be a lot cheaper for BDO to possess SCP through liquidation.
Clearly, the rehab receiver and the judge handling SCP’s case had no interest to save the company at all and it looks like they are not doing this out of patriotism. Someone must be moving heaven and earth to make sure the SCP fails in its bid for rehabilitation. Like vultures, they are just waiting for SCP to fall before feasting on its carcass.
So, what can you say about this issue?
- Steel Corporation of the Philippines (SCP), placed under liquidation proceedings
- It’s sad to lose a job this Christmas Season!
- A Petition to restore and preserve the stability of our judicial system
- Senators and Congressmen reacts on SC Flip Flopping issues
- Various Top Lawyers worried about SC Flip Flopping
Sa mata ng isang hamak na mamayang katulad ko. Isa lang ang inilalarawan ng kaganapang ito. Marmi pa rin sa ating mga politiko ang nagpapailalim sa kapangyarihan ng Pera.
Jerwel Adrian says
If the current administration rally wants to dispose of corruption, they should at least look into this. not on condemning someone over and over.
I guess, this type of acts is becoming normal here in the Philippines. Its really sad but mostly people in the present government and politians are mostly on top of these acts..
In my judicial ethics class, I’ve learned about the duties of the members of the Judiciary. They are supposed to uphold justice to every Filipino. Sad nga lang because sila mismo yung umaabuso. However, I still believe that all these problems will be solved. Someday.
I hope Algene, kawawa din kasi yug mga empleyado na nawawalan ng trabaho
Ralph Marcuss says
Pangatlong post na ito tungkol sa bakal. Dito saamin may mga nag mimina dito ng iron ore para gawing bakal daw. Ayun nasira tuloy ang magndang dagat namin color blue pa naman dati at white sand. Yung mayor kasi namin basta income sa pera kuha agad. Pero di naman yumayaman ang bayan namin.
I hope our Philippine steal will rise up again to help the Philippine economy. Government should do something about it.Our natural resources is useless if they won’t give attention on oit
this might be one of the reasons why almost everything came from other countries like China.
I just hope everyone in our country supports each other. But I guess, it’s really hard for other people when money talks.
Justin | Hari ng Lakbay says
Is this true?! Is this the one located in Balayan, Batangas?
Yes this is the one located at Balayan Batangas
Gemma|My Dailies says
This is really sad news esp to those who have been working at that company all their lives. I can only pray that people in power will be prudent with their decision making.
What’s difficult to swallow is no one seems to be going to come out on top of this issue – unless other hands are at play..
Carl, The Man of Steel says
Bad news ito. Dapat ay may gawin si Superman para mahuli ang mga magnanakaw
jrplaza (always10list) says
This is a very very sad news. From those decades where Philippines placed as one of the top steel producers and marketers worldwide had gone to dust now. Hope, those days will redeemed and be back in that spot – i strongly disagree with abuse in resources.
decisions made over the steel corporation is polically inclined and not truly for the benefit of the people .sad that we only have less of such resource but put it away just like that.
Sad to know naman na may ganito pa lang nangyayari. San na kaya ang matuwid na daan?
Sana maisalba pa tong Company nato. Sayang naman, nag-iisa na nga lang mawawala pa
Madaming tao ang nawalan ng trabaho sa pagsasara ng madaming kumpanya. Kawawa naman ang pamilyang naka depende sa kanila.
Kenneth Ravida says
the root of all of this is greed
Kung hindi natin ito papamsinin walang mangyayari