CA upholds decision on Medical City’s board elections

February 18, 2020

THE Court of Appeals has dismissed former Health Secretary Alfredo Bengzon’s bid to nullify the results of The Medical City’s board elections that ousted him as chief executive officer (CEO).

In a resolution, the CA denied his motion for reconsideration of the appellate court’s June 2019 ruling which rejected his petition for a preliminary injunction, saying he and other officers have no “vested right” to remain in their positions.

The CA upheld its previous ruling, calling Bengzon’s arguments misplaced. It said that Bengzon and his co-petitioners were not prevented from casting their votes during the Sept. 13, 2018 meeting and their term as directors and officers expired after a year in office, with the election of the new board.

“Petitioners do not have any vested right to remain in their positions indefinitely beyond the term for which they are elected, against the will of PSI’s majority stockholders, as evidently, they have already been replaced. No such rights to be protected therefore exists on behalf of Petitioners,” it said.

Also, the CA dismissed Bengzon’s claim that shares issued to investors whom he had asked for cash infusions during his time as CEO were illegal and invalid. 

Bengzon’s camp had argued that shares given to get funds for TMC’s expansion were illegal and invalid, despite he was being president and CEO during that time.

A group of investors, led by his nephew Jose Xavier Gonzales, came to the aid of TMC by pouring in millions of dollars to help TMC expand its Philippine network and set up a hospital in Guam.

Bengzon went to the Securities and Exchange Commission to rule on TMC’s on-going intra-corporate dispute, claiming that only the SEC, and not the lower courts could rule on the validity of the ownership of voting shares. 

However, the CA ruled that the controversies are ‘within the original and exclusive jurisdiction of the trial courts by virtue of Section 5.2 of the Securities and Regulation Code in relation to Section 5c of Presidential Decree No. 902-A.’ 

Meanwhile, Roderico Puno, Bengzon’s lawyer, sought to downplay the effect of the CA ruling.