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SC rules against sale of CAPPI’s pension unit to raise funds for rehab

THE Supreme Court (SC) has affirmed the move of the Insurance Commission (IC) to stop College Assurance Plan Philippines, Inc. (CAPPI) from selling its subsidiary, Comprehensive Annuity Plans and Pension (CAP Pension), to raise funds for CAPPI’s rehabilitation.

The high court, in its decision dated May 12, agreed with IC that CAP Pension, while 86% owned by CAPPI, is a corporation with “a personality separate and distinct from that of its individual stockholders” and is thus “not liable for the obligations of its parent corporation.”

The court also ruled that the order of the Regional Trial Court (RTC) for CAPPI “to dispose and sell all [its] subsidiaries and affiliates not later than December 31, 2008” should be interpreted as “an order for CAPPI to sell its equities in CAP Pension, as stated in the proposed rehabilitation plan.”

The SC further affirmed that it is the IC that is authorized under Republic Act No. 9829 to manage the financial affairs of CAP Pension to protect the interests of its policyholders and creditors.

In the same decision, however, the SC denied the petition of IC and the Securities and Exchange Commission (SEC) for reversal of the Court of Appeals ruling that supported the RTC’s approval of CAPPI’s revised rehabilitation plan.

The petitioners said the revised rehabilitation plan “is speculative and incomplete as there (was) no sufficient evidence showing the profitability of the proposed ventures.”

The SC said it could not grant the petition because such would entail its investigation of the evidence presented, whereas the high court can only decide on questions of law. — Bianca Angelica D. Añago

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