By Denise A. Valdez, Reporter

THE Medical City (TMC) Chairman Jose Xavier B. Gonzales will appeal the ruling of the Securities and Exchange Commission (SEC) which slapped a fine of at least P50.25 million on the hospital’s majority shareholders in relation to its ownership transfer.

In a text message to BusinessWorld on Tuesday, a representative of Mr. Gonzales said his camp “will appeal the ruling (of the SEC),” referring to the findings of the SEC special hearing panel that the shareholder group of TMC violated the Securities Regulation Code (SRC).

An emailed statement of Mr. Gonzales’ camp said he is dismissing the ruling of the SEC, saying the decision is “not in any way final and executory” and “maintains the status quo as they found no basis for criminal fraud.”

The SEC issued a press statement late Monday that its special hearing panel is charging Professional Services, Inc. (PSI) — the owner and operator of TMC — at least P50.25 million for what it called a surreptitious takeover” of the hospital’s ownership.

The shareholder group is composed of Viva Healthcare Ltd.; Viva Holdings (Philippines) Pre. Ltd.; Felicitas Antoinette, Inc. (FAI) and Fountel Corp.

The SEC said Viva Healthcare, Viva Holdings and FAI violated the SRC requirement that an entity buying more than 5% of a company must notify the issuer, the exchange and the SEC about such deal within 10 days.

It also said all three firms plus Fountel violated the SRC requirement that if a person or a group is buying at least 35% of a company, such plan must be disclosed and should initiate a tender offer to all shareholders.

The four companies likewise violated the requirement that the tender offer must contain all material facts, otherwise it will be considered “fraudulent, deceptive or manipulative.”

All these violations warranted a combined penalty that the SEC pegged at least P50.25 million.

The resolution outlining the details of the findings was issued by the SEC on Nov. 22. The shareholder group has 15 days from its receipt of the resolution to file a motion for reconsideration.

This development follows the SEC complaint filed by former TMC Chief Executive Officer Alfredo R.A. Bengzon, who is also the uncle of Mr. Gonzales, asking to suspend the company’s annual stockholders meeting last year due to issues arising from the company’s transfer of ownership.

Mr. Bengzon claimed his nephew was conniving with a group of foreign investors since 2013 to take over the hospital’s ownership without full disclosure to all stockholders.

In July this year, stockholders of TMC met to elect a new board of directors, going against Mr. Bengzon’s appeal, as the company gained favor from the Court of Appeals to do so in accordance to company by-laws.