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PRESIDENTIAL DECREE NO. 1452
PRESIDENTIAL DECREE NO. 1452 -
FURTHER AMENDING Section 7 OF REPUBLIC ACT NUMBERED SEVEN HUNDRED
TWENTY, AS AMENDED, OTHERWISE KNOWN AS THE RURAL BANKS' ACT
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WHEREAS,
under the present law, rural banks have to amend their Articles of
Incorporation before private persons acquiring preferred shares of
stock held by the government may enjoy the rights and privileges
appertaining to common shares of stock; and
WHEREAS, to make investments in rural banks attractive and to further
stimulate the growth of such banks, there is need to provide for the
automatic conversion of preferred shares of stock into common stock
upon sale to private parties.
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines,
by virtue of the powers vested in me by the Constitution, do hereby
order and decree the amendment of Republic Act No. 720, as amended, as
follows:cralaw:red
Section 1. Section seven of Republic Act Numbered
Seven Hundred and Twenty, as amended, is hereby further amended to read
as follows: chanroblesvirtualawlibrary
"Sec. 7. To provide supplemental capital to any Rural
Bank until it has accumulated enough capital of its own to stimulate
private investments in Rural Banks, the Development Bank of the
Philippine shall, upon certification of the Monetary Board which shall
be final, of the existence of such need, subscribe within thirty days
to capital stock or any Rural Bank from time to time in an amount equal
to the total equity investment of the private shareholders which shall
be paid in full at the time of subscription but not exceeding one
million pesos: Provided, however, That shares of stock issued to the
Development Bank of the Philippines, pursuant to this section, may, at
any time, be paid off at par and retired in whole or in part if, in the
opinion of the Monetary Board, the Rural Bank has accumulated enough
capital strength to permit retirement of such shares; or if an offer is
received from private sources to replace the equity in investments of
this Development Bank of the Philippines with an equivalent investment
or more in the common stock of such Bank. In case of such retirement of
stock or replacement of equity investments of the Development Bank of
the Philippines, the registered private shareholders of the Rural Bank
shall have the right of pre-emption within one year from date of offer
in proportion to their respective holdings.
Stock held by the Development Bank of the Philippines, under the terms
of this section, shall be made preferred only as to assets upon
liquidation and without the power to vote and shall share in dividend
distributions not exceeding two percent thereof without preference:
Provided, however, That if such stock of the Development Bank of the
Philippines is sold to private shareholders, the same shall be
converted automatically into common stock of the class provided for in
section nine: Provided, further, That pending the amendment on the
Articles in Incorporation of the Rural Bank, if necessary, for the
purpose of reflecting the conversion into common stock of preferred
stock sold to private shareholders, the transfer shall be recorded by
the Rural Bank in the stock and transfer book and such shareholders
shall thereafter enjoy all the rights and privileges of common
stockholders. The preferred stocks so transferred shall be surrendered
and cancelled and the corresponding common stocks shall be issued.
The corporate secretary of the Rural Bank shall submit to the Central
Bank and the Securities and Exchange Commission a report on every
transfer of preferred stock to private shareholders, and such report
received by the Securities and Exchange Commission shall form part of
the corporate records of the Rural Bank. When all the preferred shares
of stock of a Rural Bank have been sold to private shareholders, the
Articles of Incorporation of the Rural Bank shall be amended to reflect
the conversion of the preferred shares of stock into common stock.
For this purpose, the President, the corporate secretary, and a
majority of the Board of Directors shall issue a certificate that all
preferred shares have been sold and transferred to private shareholders
which, together with a copy of the Articles of Incorporation, as
amended, duly certified correct by the said President, corporate
secretary, and a majority of the Board of Directors, shall be filed
with the Securities and Exchange Commission, which shall attach the
same to the original Articles of Incorporation on file with said office.
The Securities and Exchange Commission shall not register the amended
articles of incorporation unless accompanied by the certificate of
authority required under Section nine of Republic Act Numbered Three
Hundred and Thirty-Seven, as amended."
Section 2. This Decree shall take effect immediately.
DONE in the City of Manila,
this 11th day of June, in the year of Our Lord, nineteen hundred and
seventy-eight.
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