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NTC petitions DoJ for a swift decision on Smart’s CURE purchase

23 Oct 2008

The Philippines’ telecoms regulatory authority, the National Telecommunications Commission (NTC), is pressing for the Department of Justice (DoJ) to make a swift decision on the legality of Smart Communications’ purchase of shares in two companies that own 3G mobile entrant Connectivity Unlimited Resource Enterprise (CURE). The NTC is concerned the acquisition could be in breach of the country’s Public Service Act and has asked the DoJ for a legal ruling on whether Smart’s move for the entire issued and outstanding stock of PH Communications Holdings Corp and Francom Holdings Inc (FHI) violates Section 20 of Commonwealth Act 146. In a statement, NTC deputy commissioner Jorge Sarmiento said: ‘We asked for an opinion because we believe that we should have been informed about it [i.e. Smart’s purchase]. To be sure that there was no violation and also for similar incidents that could take place in the future we want the DoJ to comment on this’.

Smart, a unit of national fixed line operator PLDT, acquired the stock in April this year for a total consideration of PHP419.54 million (USD8.59 million). PH Communications Holdings and FHI own 100% of CURE, and Smart argues that since it has no direct holding in CURE it has not broken the law. ‘The transactions are not covered by the provisions of the Public Service Act as the transactions involved the shares of stock of PH Communications and FHI, not the shares of CURE itself,’ said Smart’s head for legal and regulatory affairs Enrico Espanol.

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