Re: Effectivity of Memorandum Circular No. 16, Series of 2002; Chairman as Independent Director

August 9, 2018SEC-OGC OPINION NO. 13-18RE: EFFECTIVITY OF MEMORANDUM CIRCULAR NO. 16, SERIES OF 2002; CHAIRMAN AS INDEPENDENT DIRECTORAtty. Briccio Joseph C. BoholstCorporate Secretary and Compliance OfficerCity Sports Club Cebu, Inc.Cardinal Rosales AvenueCebu Business Park, Cebu CityDear Atty. Boholst :This refers to your letter dated 21 September 2016 requesting for an opinion on whether the Commission's Memorandum Circular No. 16, Series of 2002 (hereinafter referred to as "MC No. 16") is still in force or whether it is a violation of MC No. 16 when one (1) of the only two elected independent directors of a corporation with seven directors becomes Chairman of the corporation to which he is an independent director. With regard to the first query, MC No. 16 is still in force and effect. The provisions of MC No. 16 are embodied in Section 38 of the Securities Regulation Code, n to wit:"Section 38. Independent directors. — Any corporation with a class of equity securities listed for trading on an Exchange or with assets in excess of Fifty million pesos (P50,000,000.00) and...