CA stops antitrust review of SMC telecom business buyout

The Court of Appeals (CA) has stopped the antitrust commission from reviewing the P69.1-billion co-acquisition of San Miguel Corp.'s telecom business by PLDT Inc. and Globe Telecom Inc.

A writ of preliminary injunction was issued by the CA 12th Division against Philippine Commission Competition (PCC), covering a review of the deal the telcos announced in May.

The appellate court said the injunction will be in place while it is hearing the consolidated petitions filed by PLDT and Globe against the commission.

"Finding PLDT's application for injunctive relief to be meritorious, in order to maintain the status quo ante while the case is being judiciously studied and to preserve the rights of the parties during the pendency of the instant petition and not to render ineffectual whatever judgment that may be rendered by this Court.

"Let a writ of preliminary injunction be issued, enjoining and directing the respondent PCC, their officials and agents, or persons acting for and on their behalf to cease and desist from conducting further proceedings for the pre-acquisition review and/or investigation of the subject acquisition... until further orders from this Court," the CA said in a resolution dated August 26.

The CA ordered a P1-million bond for the injunction to take effect.

In a text message, PLDT said "... we have no received a copy of the CA ruling... deferring comment until we have had a chance to review it."

In a separate disclosure to the Philippine Stock Exchange, Globe noted it also hasn't received a copy of resolution from the CA regarding the matter "and thus are not able to comment further ..."

The PCC also hasn't seen the resolution, but it intends to pursue the case.

"The PCC has not received a copy of the resolution allegedly issued by the 12th Division of the CA," PCC Chairman Arsenio Balisacan said in another text message.

"The PCC is currently examining appropriate legal options in light of the resolutions issued by the CA," Balisacan noted.

The anti-trust commission remains committed to promoting competition in the telecommunications industry so that "consumers can benefit from more reliable mobile services, faster internet, and lower prices," the PCC chair added.

The appellate court said PLDT "will suffer grave and irreparable injury not subject to mathematical computation for it will adversely affect its stock traded in the market" if the PCC isn't restrained at this point.

The review may also affect the telco's ability to raise money to pay its maturing obligation under the purchase and sale agreement and finance the "necessary infrastructure badly needed to improve the internet speed and connection nationwide," the CA noted.

"Unless enjoined, the implementation of the co-use agreement approved by the National Telecommunications Commission (NTC) will be derailed and ... jeopardized subjecting PLDT to possible sanctions by NTC," the CA resolution read.

The P69.1-billion deal covers the purchase price of P52.08 billion for SMC unit Vega Telecom and the assumption of around P17.02 billion in liabilities.

Vega Telecom owns controlling interests in Bell Telecommunication Philippines Inc., Eastern Telecommunications Philippines Inc., Cobaltpoint Telecommunication Inc. (formerly Extelcom), Tori Spectrum Telecommunication Inc. (formerly Wi-Tribe), and Hi-Frequency Telecommunication Inc.

Globe and PLDT have emphasized that the transaction was above board and did not violate any provisions of the country’s Philippine Competition Act.

The PCC, however, said a review was warranted in order to protect consumers and promote competition in the market. — With Jon Viktor Cabuenas/VDS, GMA news