Professional Documents
Culture Documents
1989
January 19, 1989
The Chairman
Securities and Exchange Commission
SEC Bldg. EDSA Greenhills
Mandaluyong, Metro Manila
Madam:
This refers to the query of that Office on whether or not it may give due course to
the application for incorporation of Far Southeast Gold Resources, Inc.
("FSEGRI") to engage in mining activities in the Philippines in the light of this
Department's Opinion No. 84, s. 1988 applying the so-called "grandfather rule" in
interpreting the constitutional provision regarding the nationality requirement for
corporations qualified to acquire lands in the Philippines.
It appears that FSEGRI's capital consists of 10,000 common shares which are
categorized into Class "A" and Class "B" shares; that the Class "A" shares, which
constitutes 60% of its equity, can only be held by Filipinos, while the "Class B"
shares, which constitute the remaining 40% can be owned by both Filipinos and
foreigners; and that 25% of the authorized capital stock of the FSEGRI has been
subscribed as follows: 40% Galactic Resources Ltd., a Canadian corporation,
while the remaining 60% is held by Lepanto Consolidated Mining Company,
which in turn has alien stockholding to the extent of 17% of its total capital.
It further appears that on February 28, 1967 the SEC promulgated rules and
regulations on the implementation of the constitutional and statutory
requirements that the controlling interests of enterprises engaged in the
exploitation of the natural resources should be held by citizens of the Philippines
or by corporations or by associations at least 60% of the capital of which is
owned by such citizens, and which provide for the following rule in the
determination of citizenship of corporations with alien equity, to wit:
"Shares belonging to corporations or partnerships at least 60% of the
capital of which is owned by Filipino citizens shall be considered as of Philippine