PHILIPPINE VETERANS BANK VS. CALLANGAN G.R. No.

191995, August 3, 2011 (Resolution)

A “public company” contemplated by the SRC is not limited to a company whose shares of stock are
publicly listed. Even companies like the Bank, whose shares are offered only to a specific group of
people, are considered a public company, provided they meet the requirements enumerated in
Section 17.2 of the SRC.

Facts: Director Callangan of the Corporation Finance Department of the SEC sent PH Veterans Bank a
letter informing the latter that it qualifies as a “public company” under Section 17.2 of the SRC, thus
required to comply with the reportorial requirements of said provision.

Veterans Bank responded it is not a public company, but a private company whose shares of stock are
available only to a limited class or sector: WW2 veterans, not the general public.

Callangan rejected Veterans Bank’s explanation and assessed it a penalty of P1.9 million for failure to
comply with the SRC Reportorial Requirements from 2001 to 2003. Callangan rejected the bank’s motion
reconsideration of the assessment. The SEC En Banc dismissed the appeal. The CA affirmed the SEC
ruling. Before the SC, Veterans Bank reiterated that only WW2 veterans, widows, orphans, and
compulsory heirs can own shares. Additionally, being considered a public company would compel it to
spend at least P40 million to reproduce and mail the “Information Statement” to its 400,000
shareholders nationwide.

Issue(s): 1. Whether or not the Veterans Bank is a public company burdened with the reportorial
requirements under Section 17.1 and 17.2 of the SRC.

Held: 1. Yes, Veterans Bank is a public company subject to the reportorial requirements. Section 17.2(c)
of the SRC provides that a the reportorial requirements under Section 17 applies to an issuer with assets
of at least Fifty million pesos (P50,000,000.00) or such other amount as the Commission shall prescribe,
and having two hundred (200) or more holders each holding at least one hundred (100) shares of a class
of its equity securities. Likewise, Rule 3 (1) (m) of the Amended Implementing Rules and Regulations of
the SRC, which defines a "public company" as "any corporation with a class of equity securities listed on
an Exchange or with assets in excess of Fifty Million Pesos (P50,000,000.00) and having two hundred
(200) or more holders, at least two hundred (200) of which are holding at least one hundred (100)
shares of a class of its equity securities.”