Rodolfo M. Cuenca vs. Philippine National Construction Corporation, et al.

 [SEC-SICD * CASE NO. 05-96-5357. July 10, 2000.]RODOLFO M. CUENCA, plaintiff, vs. PHILIPPINE NATIONAL CONSTRUCTION CORPORATION, ASSET PRIVATIZATION TRUST, PHILIPPINE NATIONAL BANK, DEVELOPMENT BANK OF THE PHILIPPINES, NATIONAL DEVELOPMENT COMPANY, PHILIPPINE EXPORT AND FOREIGN LOAN GUARANTEE CORPORATION, AND GOVERNMENT SERVICE INSURANCE SYSTEM, defendants.Corporation Code; Section 62; watered shares; case at bar. — It has been proven that LOI No. 1295 was implemented through the conversion of the GFI's loan receivables from PNCC into equity of the latter. By said conversion, PNCC issued shares to the GFI's in consideration for the extinguishments of PNCC's loan obligations to the GFI's in the amount equivalent to the value of the shares issued by PNCC to said GFI's. Hence, the shares issued to the GFI's can not be considered "watered". Section 62 of the Corporation Code expressly allows the issuance of shares of stock in consideration for the previously incurred indebtedness of the issuer. HESCcAD E C I S I O NThis is a complaint to annul certain shares of the capital stock issued by Philippine National Construction Corporation...