March 28, 2019
SEC-OGC OPINION NO. 14-19
RE: CREATION OF APIC USING VALUE OF AN AIRCRAFT; NON-SCHEDULED DOMESTIC AIR TRANSPORT AS NATIONALIZED BUSINESS ACTIVITY
Reyes Diano Tumanda & Co. CPAs
2/F Xerografix World Plus Building
Lot Space 3, Manila Ave. cor. Canal Rd.
CBD, Subic Bay Freeport Zone
Attention: Peter R. Tumanda
Managing Partner
Gentlemen :
This refers to your letter dated 19 November 2018, requesting an opinion on (1) whether or not the value of an aircraft may be used to create additional paid-in capital (APIC), and (2) whether or not "non-scheduled domestic air transport" is a nationalized activity (i.e., public utility).
If domestic air transport is a nationalized activity, you further inquire as to: (a) whether or not a foreign shareholder may infuse the APIC, and (b) whether or not APIC infused by a foreign shareholder should be included in the computation of foreign ownership.
1. Creation of APIC using the value of an aircraft
The creation of APIC is a matter within the business judgment of the corporation. 1 It does not require the prior approval of the Commission.
However, since the consideration here is...
