SCP Employees questions Judge Ruben Galvez; How Much?

Steel Corporation of the Philippines is the last fully integrated steel plant still standing in the country and it must be saved from predatory takeover attempts by those casting a moist eye on its business for their own selfish interests. Because BDO failed to take over SCP after forcibly bringing it to corporate rehabilitation, fear are rife that it now wants to do it again by using the liquidation order as an excuse to use SCP funds to selectively buy back its debts held by the other creditors to complete the takeover.



After the Batangas Regional Trial Court Branch-3 issued an order for the company to undergo liquidation proceedings, about 300 employees of Steel Corporation of the Philippines (SCP) are now in danger of losing their jobs?



That decision ignited the employees to protest what they see as a clear violation of the Labor Code of the Philippines.



The employees of SCP also stressed that the rehab court disregarded the earlier orders of the Court of Appeals and Supreme Court where there are still pending cases filed by the group in connection with the issue.



Because of the alleged lack of knowledge of RTC Branch-3 Judge Ruben Galvez about the real state of their company, more than 50 SCP workers who zoomed to the Batangas Hall of Justice fear of losing jobs, it’s sad because Christmas season is approaching.



The angry employees voiced out “Magkano ang perang involved Judge?!” (How much money is involved Judge?!), in front of Batangas City Hall of Justice of Justice as they asked Judge Galvez to inhibit from the case. The legal counsel of SCP has already filed a Motion to Intervene with Motion to Suspend Execution of the Order of Liquidation.



Atty. Herman Nicdao said; more than 300 employees of SCP will not be able receive their wages once the order is implemented.  He then called on Judge Galvez to resolve the dispute as soon as possible for the sake the families of SCP employees.



In his statement, he said;

“Although BDO assured that if the liquidation proceedings is carried out, they will take care of the financial aspect of the affected workers, what assurance can they give that they are talking about the continuous employment of the workers and not talking about the separation pay of the workers?”



He also reiterated that implementation of the liquidation proceedings can be considered a court blunder without the issuance of a 30-day prior notice to the employees for work stoppage as stated in the Labor Code.



He also added: “As I stressed earlier, the SCP was in full operation prior to the issuance of the liquidation proceedings. There is no reason to cease operation. So under the law, a 30-day prior notice is required before an employee may be terminated,”



Until now, Nicdao maintained that the workforce of SCP is not yet formally informed of the reasons why their company will cease operation.



It was noted that BDO has yet to give an assurance that employees of SCP will be absorbed once they take over the company while there are ongoing debate by the counsels from both parties



Moreover, Atty. Ferdinand Topacio, another counsel for SCP, shared that it is indicated in the corporation code that in cases of liquidation proceedings, the baseline of loans and credits should be made clear to every stake holders.



 “In the present case, the baseline has not yet been accurately determined… There are several entities whose interests also have to be considered by the court… There are the labor force, the unsecured creditors, and the stockholders.”



To determine accurately the loan amount SCP got from each creditor, Topacio explained that there are other creditors who are part of the case aside from BDO who agreed to defer the liquidation for the meantime.



“Since the properties are in custodia legis anyway, election of a liquidator is not yet necessary,” he pointed out. “We implore the court to have a second look.”



Topacio hopes that justice will be served not only for the interest of SCP but also for the welfare of its 300 employees who are in peril of losing a source of living.



An amount of P1.3-B from different creditors that includes Banco De Oro (BDO) which is owned by business tycoon Henry Sy of SM was earlier reported that the order for liquidation proceedings transpired after SCP loaned



Reports say that BDO immediately filed a petition to place SCP under corporate rehabilitation after the later failed to pay for the loan on time which led to the liquidation proceedings as directed by Judge Galvez.  Once the proceedings are completed, BDO can easily take control of SCP and all its assets.



Atty. Norma Singson De Leon recently issued a report that SCP is no longer operating rather it was placed under “maintained” and “padlocked” status, which was also revealed that court-appointed receiver was then followed by the issuance of the liquidation order from Galvez.



SCP Employees Union President Ruben Rodriguez denied the allegations and stated that their company is 100% fully operational.



“Hindi kailanman tumigil ang operasyon ng aming kumpanya. Baka ang sinasabi nila ay yung pagpapahinto ng operation ng isa sa aming linya na bihira din namang nangyayari. Pero kapag hininto ang isang linya, ay tuloy pa rin ang trabaho ng lahat dahil inililipat ang ilan sa amin sa ibang linya kaya’t walang nababakanteng trabahador sa min!” Rodriguez emphasized.

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Stealing Steel Corporation of the Philippines

Despite the government's aggressive campaign to attract investors to the Philippines and the various reforms initiated purportedly to fight red tape and corruption in the bureaucracy, doing business in the Philippines remains very difficult because of the frequent meddling by the courts even at the expense of public interest.



And by all indications, while the war against corruption is now being won in the government bureaucracy, the judiciary seems to be losing the battle even after the impeachment of former Chief Justice Renato Corona who was dragged into various allegations of corruption and other indiscretions.



Take the case of the Steel Corporation of the Philippines, the country's only remaining fully integrated steel plant, which was forcible brought to corporate rehabilitation in 2006 by Banco de Oro (BDO) upon orders by the court. This is now the reason why the local steel industry in the Philippines is now practically dead and much of the country's steel supply are now smuggled and unrated Chinese steel.



The action for a corporate rehabilitation against SCP came despite the pendency of several appeals at the Court of Appeals and the Supreme Court. For some strange reasons, the rehab court has all of a sudden, issued an order on 19 September 2012 converting the rehabilitation proceedings into one of liquidation based on the outdated, erroneous, and speculative report of the rehab receiver.



Moreso, this action of the rehab court being presided over by Judge Ruben Galvez of the Batangas Regional Trial Court's Fourth Judicial Region, Branch 3 was in utter disregard of judicial courtesy and of SCP's ’s fundamental right to due process.



The local steel industry is already in pain because while the Philippines is so rich with high grade iron ores and other minerals needed the production of steel, many local steel plants have shut down especially during the onslaught of the Asian Financial Crisis in 1997. Despite the financial challenges, SCP struggle to survive only to be placed under rehab proceedings and without any due process, be converted into one of liquidation upon the mere recommendation of the rehab receiver, whose appointment, experience and qualifications are questionable?



Isn't in more prudent that all efforts should be focused on the rehabilitation of SCP instead of being quickly dissolved especially if the owners and investors are more than willing to to save their own company? Why is it that the rehab court under Galvez is too much in a hurry to practically erase the SCP on the face of the planet?



For one, the appointed rehab receiver, Atty. Norma Singson-De Leon, based her recommendation to liquidate SCP on information which are false, grossly inaccurate and pure hearsay, and on conclusions which are erroneous, reckless, illogical, unfounded and prejudiced. She never truly intended to rehabilitate SCP but was just fishing for evidence to support her premeditated objective of liquidating SCP.



Contrary to the rehab receiver’s findings, SCP handily passed the balance sheet and cash flow tests of solvency prescribed under both the old and new law of corporate rehabilitation. Based on its audited financial statements for 2011, its total assets exceeded its total liabilities by php5.3 billion (“balance sheet test”) and its current assets exceeded its current liabilities by php2.9 billion (“cash flow test”).



It is clear that the Rehab Receiver never truly intended to rehabilitate SCP but was just fishing for evidence to support her premeditated objective of liquidating SCP.



For whatever reason, it is reeks with anomaly for a Rehab Receiver to be rushing SCP's liquidation instead of allowing first for its rehabilitation. Besides, it is obvious that the rehab receiver is clearly unqualified for a heavy manufacturing company like SCP having had only two previous experiences for companies which are less than 10% the size of SCP. It also turned out that SCP’s rehab receiver has been discharged twice as rehab receiver by two rehab courts in the past.



Judge Galvez's court violated the right of SCP and other interested parties to due process as he did not exert any effort to hear the side, not only of SCP, but also those of the creditors and the other interested parties before ordering its liquidation. How can Judge Galvez even issue the liquidation order against SCP on the basis of the mere say-so of an inexperienced rehab receiver, without giving all affected parties their day in court and without the implementing rules and regulations?



Why is he in a rush to liquidate a company which is the country's last stand against the invasion of substandard and China-made steel?



While there are pending petitioned before the Supreme Court and the Court of Appeals, Judge Galvez seemed to be too over-eager to implement the recommendation of Singson-De Leon even if it means that this would pre-empt the ruling of both superior courts.



It simply ignored the doctrine of judicial courtesy which requires that lower courts must await the decision of higher courts on matters related to cases before it. Otherwise, the appeals may be rendered moot and academic, and useless, resulting in judicial anarchy. Moreso, why can’t the rehab court wait for the decisions of the higher courts as it has always done in the past instead of risking being cited in contempt?



In ordering the liquidation of SCP, the Galvez court may have committed contempt of court by preempting the pending decisions of the Court of Appeals and the Supreme Court. Disregarding the superiority of the CA and the SC as arbiters of the SCP's case is tantamount to abuse of discretion and does not sit well with the judiciary's earnest struggle to regain the people's trust and confidence which was somehow eroded by the painful Corona impeachment trial.



SCP is the last fully integrated steel plant still standing in the country and it must be saved from predatory takeover attempts by those casting a moist eye on its business for their own selfish interests. Because BDO failed to take over SCP after forcibly bringing it to corporate rehabilitation, fear are rife that it now wants to do it again by using the liquidation order as an excuse to use SCP funds to selectively buy back its debts held by the other creditors to complete the takeover.



This would not only allow an easier takeover but it would be a lot cheaper for BDO to possess SCP through liquidation.



Clearly, the rehab receiver and the judge handling SCP's case had no interest to save the company at all and it looks like they are not doing this out of patriotism. Someone must be moving heaven and earth to make sure the SCP fails in its bid for rehabilitation. Like vultures, they are just waiting for SCP to fall before feasting on its carcass.



On a note, Superman; the man of steel should give those corrupt officials a lesson!