The Medical City Chairman Jose Xavier Gonzales slammed the decision of the Securities and Exchange Commission to nullify his group’s acquisition of a majority stake in the firm that owns the hospital.
In a statement, Gonzales said he is “the majority owner of Fountel, which along with FAI Inc., Viva Holdings, and Viva Healthcare, invested in the growth and expansion of The Medical City in 2013.”
“We are disappointed with the questionable decision of the Securities and Exchange Commission, which our legal team believes to be arbitrary, unfounded, and, to a certain extent, overreaching,” Gonzales said.
He added that, “Fortunately, the law provides remedies that will allow these errors to be corrected.”
Gonzales noted, “The decision effectively forces The Medical City to pay us back at least P10 billion in cash that we have been investing since 2013. This adds further pressure and uncertainty to a hospital network already straining with the many problems caused by the COVID crisis, including its cash flow. Currently, The Medical City continues to wait for PhilHealth to settle an estimated P750 million worth of reimbursements.”
He added that, “By forcing The Medical City to give us back the cash we have been investing in its growth since 2013, the SEC risks depriving the hospital network of badly-needed resources in its fight against COVID.”
“My co-investors believe it is far more important, at this critical time, to ensure that The Medical City can continue to provide world-class healthcare to Filipinos during this century’s worst healthcare crisis,” he said.
Gonzales vowed that, “We will exhaust all legal means possible to ensure that the SEC’s decision will not affect the continuing operations of The Medical City.”
The SEC has found that fraud was used to takeover The Medical City and thus nullified the acquisition of the majority stake in Professional Services, Inc. (PSI), which operates the hospital.
The SEC En Banc affirmed the resolution issued by a special hearing panel (SPH) penalizing Viva Holdings (Philippines) Pre. Ltd., Viva Healthcare Limited, Fountel Corporation and Felicitas Antoinette, Inc. (FAI) for violating the mandatory tender offer rules and committing fraud in taking over PSI.
However, the Commission En Banc modified the resolution to declare null and void with immediate effect all share acquisitions made by Viva Holdings, Viva Healthcare, Fountel and FAI in PSI beginning August 1, 2013.
Following the nullification of the shares acquired by the respondents, the Commission En Banc directed the SEC Office of the General Counsel to immediately resolve the case relating to the conduct of meeting and the election of the members of the board of directors of PSI.
The Commission En Banc further modified the SHP resolution to declare the respondents are solidarily liable for the penalty imposed, having acted as beneficial owners of each other’s shares in PSI.