The 12th Division of the Court of Appeals (CA) has halted the antitrust review of San Miguel Corp’s (SMC’s) telecom business buyout by PLDT Inc. (formerly Philippine Long Distance Telephone Co.) and Globe Telecom for a total of PHP69.1 billion (USD1.48 billion). In its ruling the CA granted PLDT’s request – filed in July – for a temporary restraining order or a preliminary injunction on the Philippine Competition Commission’s (PCC’s) review of the landmark takeover, in what is seen as a major body blow to the watchdog’s attempt to ensure a level playing field for the industry. Whilst the PCC had sought to review the takeover on the grounds that it was deemed ‘deficient and defective’ and raised competition concerns, PLDT filed an injunction seeking to stop the investigation on the grounds that the PCC had already rubber stamped it. Last month PLDT head of regulatory affairs, Ray Espinosa, went on record as saying that under the PCC’s own rules the transaction had already been ‘deemed approved’, citing the watchdog’s own memorandum circulars, which require all companies to notify the PCC in mergers or acquisitions worth PHP1 billion or more. For its part, Globe added: ‘The PCC cannot by whim or caprice state that it wants a review without any legal basis. The PCC cannot withhold and block the transaction out of a process not found in their own rules, and not disclosed to the public.’
In its resolution, the CA adjudged: ‘After a painstaking evaluation of the parties’ arguments … 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 judgement that may be rendered by this court, it would be more prudent for this court to grant petitioner’s prayer for a preliminary injunction.’ Further, the court decision confirms: ‘We agree with PLDT that, due to the ‘deemed approved’ status extended to the subject acquisition by virtue of the transitory rules, at the very least, PLDT has a clear right to be protected from the pre-acquisition review and/or investigation conducted by respondent PCC,’ concluding: ‘[Let] a writ of preliminary injunction be issued, enjoining and directing the respondent PCC … 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.’
In the wake of the ruling, the government’s anti-trust body noted the ‘temporary setback’, and said it might appeal the CA decision.