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[G.R. No. 125469. September 24, 2001.]

PHILIPPINE STOCK EXCHANGE, INC. vs. SEC, et al.

THIRD DIVISION

Gentlemen:

Quoted hereunder, for your information, is a resolution of this Court dated SEPT 24 2001.

G.R. No. 125469.(Philippine Stock Exchange, Inc. vs. Securities and Exchange Commission and Puerto Azul Land, Inc.)

For resolution are the separate motions for reconsideration filed by respondents SEC (thru the Solicitor General) and Puerto Azul, Land, Inc. (PALI) of the Decision promulgated on October 27, 1997 by this Court in this case ¹ Penned by Justice Justo P. Torres, Jr. (now retired) with Justices Florenz Regarado (also retired), Reynato Puno and Vicente Mendoza, concurring., the dispositive portion of which reads:

"ACCORDINGLY, in view of the foregoing considerations, the Court hereby GRANTS the Petition for Review on Certiorari. The Decisions of the Court of Appeals and the Securities and Exchange Commission dated July 27, 1996 and April 24, 1996, respectively, are hereby REVERSED and SET ASIDE, and a new Judgement is hereby ENTERED, affirming the decision of the Philippine Stock Exchange to deny the application for listing of the private respondent Puerto Azul Land, Inc.

SO ORDERED."

Thereafter, petitioner Philippine Stock Exchange, Inc. (PSE) filed its comment on both motions, PALI then filed its reply, followed by petitioner's rejoinder.

Movant PALI contends that:

"I. The claims against PALI are shown on record to be sham and frivolous, hence, those claims cannot bring to serious question the qualification of PALI to sell its share to the public through the stock exchange.

II. If not reconsidered, the Honorable Court's Decision which unwittingly dignifies nuisance and harassment claims will foment and encourage groundless and extortionate claims against companies wanting to list in the stock exchange, because all one has to do to block such listing is to assert all kinds of baseless and frivolous claims. The Decision will have a chilling effect on investment and capital market.

III. The Honorable Court's application of the best judgement rule-restricting SEC's review of the PSE's denial of listing application only to cases where the PSE has acted in bad faith unduly emasculates the SEC's statutory power and authority over a stock exchange, and is inconsistent with this Court's own primordial affirmation that the SEC is the entity with the primary say as to whether or not securities, including shares of stock of a corporation. may be traded or not in the stock exchange.

IV. The Honorable Court failed to consider the factual findings by the SEC, and affirmed by the Court of Appeals, which formed the basis for the SEC's and appellate court's factual determination that the PSE acted in bad faith in denying PALI's listing application.

V. If not reconsidered, the Decision affirming the PSE's denial of PALI's listing application will deprive PALI of its constitutional right to equal protection of the laws since as found by the SEC and affirmed by the Court of Appeals, the FSE, in other instances, had approved listing applications of other companies facing far more serious and substantial claims than those raised against PALI.

VI. The Honorable Court failed to consider the SEC's and the appellate court's finding, conceded by the PSE, that PALI complied with all the listing requirements."

Upon the other hand, the Solicitor General counters that:

"I. SEC does not only have the power of supervision and regulation, but also the power of control over all corporations and stock exchanges.

II. The business judgement rule is inapplicable.

III. SEC's finding of bad faith on the part of PSE is supported by substantial evidence and hence, must be accorded great weight and respect."

We reviewed very carefully movants' arguments but found no compelling reason to reverse or modify the assailed Decision. In fact, the issues raised by movants have been passed upon by this Court in its Decision sought to be reconsidered.

WHEREFORE, the motions are DENIED with finality.

SO ORDERED.

Very truly yours,

(Sgd.) JULIETA Y. CARREON
Clerk of Court

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