The Securities and Exchange Commission (SEC) will investigate complaints against companies that refuse to allow stakeholders to inspect or reproduce corporate records.
The SEC issued a new memorandum circular on Aug. 20 to uphold the right of any director, trustee, stockholder or member of a corporation to request copies or excerpts of corporate records for inspection. This right is guaranteed under the Revised Corporation Code of the Philippines.
If such a right is violated, the memorandum said affected individuals may file a complaint with the SEC, through its Company Registration and Monitoring Department or any of its extension offices. Complainants need to pay a filing fee of P10,130.
The SEC considers it a violation if the company refuses to allow a stakeholder to inspect corporate records, fails to take steps to allow access to corporate records, and fails to give a reasonable amount of time to inspect records.
Upon receipt of a complaint, the regulator will investigate the case by summoning the involved respondents to a clarificatory conference.
The parties have an option to settle the matter amicably, but the SEC may still proceed with its investigation and decide on whether the respondents may be penalized.
The sanctions for such violation will be any or all of the administrative sanctions listed in the Revised Corporation Code of the Philippines. These are a P5,000-P1,000 fine per day of violation, a permanent cease and desist order, revocation of certification of incorporation, and dissolution of the corporation and forfeiture of its assets.
While the guidelines aim to enforce the right to inspect and/or reproduce corporate records, such activity is still bound by confidentiality rules under prevailing laws, such as the Intellectual Property Code of the Philippines, the Data Privacy Act and the Securities Regulation Code. — Denise A. Valdez