THE Philippine Competition Commission (PCC) has asked the Court of Appeals (CA) to declare the P70-billion buyout by PLDT and Globe of San Miguel Corp.’s (SMC) telecommunications subsidiaries as void and for the whole transaction to be undone.

In its comment to the petition filed by Globe before the CA’s Sixth Division, the PCC said the P70-billion purchase of PLDT and Globe of San Miguel’s telecommunications assets, particularly the rights over the 700-mhz frequencies, did not comply with the new requirements under the new Philippine Competition Act (PCA) enacted in 2015.

The PCC said the notification of the transaction, which the parties filed with the agency, lacked material information, making such notification ineffective and, thus, rendering the transaction as not among those that can be considered as “deemed approved.”

The said P70-billion buyout was executed before the implementing rules and regulations of the new PCA had been promulgated, but during the effectivity of the PCC’s Memorandum Circular (MC) 16-002, which prescribes guidelines on how parties in mergers and acquisitions should notify the PCC regarding their transactions, which are worth P1 billion and above.

The PCC said the “sparse” notification filed by the parties to the transaction did not disclose the key terms of the transaction as required under MC 16-002.

In its comment, the PCC noted that, based on the notification filed by the parties before the PCC, the key terms of the transaction were as follows: “The seller, purchasers and VTI [Vega Telecom Inc.] shall execute a sale and purchase agreement [SPA]. The SPA contains the terms and conditions of the transaction, including the payment terms, representations and warranties and covenants of the parties, and other provisions governing the transaction.”

“Clearly, in the notice, petitioner [Globe] did not even disclose any actual information on the key terms of the transaction required under paragraph 1[f] of MC 16-002. Said notice merely stated that the parties shall execute a SPA, which contains the terms and conditions of the transaction,” the PCC’s comment read.

Aside from praying for the declaration of the P70-billion deal as void, the PCC also asked that the parties to the transaction be fined the mandated administrative penalties ranging from 1 to 5 percent of the total transaction cost.

“Therefore, aside from denying the instant petition for lack of merit, the Honorable Court should issue an order consistent with the legal consequences of the transaction being declared void, that is, an order directing petitioner to, among others: [i] cease and desist from further implementing the subject acquisition; [ii] undo all acts consummated pursuant to the subject acquisition; and [iii] pay the appropriate administrative penalties that may be imposed by respondent under the PCA for the illegal consummation of the subject acquisition,” the PCC’s comment read.