Creating The PEFTOK Investment And Development Corporation Defining Its Powers And Functions And For Other Purposes

Case Overview and Summary

Summary of Presidential Decree No. 257

Creation of PEFTOK Investment and Development Corporation
- A corporation called the PEFTOK Investment and Development Corporation is created. (Section 1)
- Its principal office is in Quezon City, Philippines or as determined by the Board of Directors. (Section 1)

Powers and Functions of the Corporation
- The corporation has general powers under the Corporation Law, as long as they are not inconsistent with this Decree. (Section 1)
- Specific powers of the corporation include: (Section 1)
    - Invest in, purchase, acquire, hold, use, sell, lease, assign, transfer, alienate, dispose, or encumber real and personal property. (Section 1a)
    - Undertake, organize, form, promote, develop, or establish businesses and enterprises. (Section 1a)
    - Promote and develop agriculture in the Philippines. (Section 1b)
    - Manufacture, buy, sell, and deal in articles, goods, wares, merchandise and commodities. (Section 1c)
    - Enter into and perform contracts, undertakings and obligations. (Section 1d)
    - Acquire and/or lease lands from the Philippine Government for agricultural, pastural and related purposes in excess of the areas allowed to private corporations. (Section 1e)
    - Borrow money and incur indebtedness without limit, and issue bonds, debentures, stock, warrants, notes or other obligations. (Section 1f)
    - Grant loans to stockholders for the purpose of enabling them to join cooperative associations owned or controlled by PEFTOK veterans, up to 50% of the par value of their stocks, payable within one year. (Section 1g)
    - Engage in and carry on the business of general wholesale and retail merchants, importers, exporters, commission merchants, brokers, factors, agents, manufacturers, processors. (Section 1h)
    - Carry on any other lawful business that promotes the interest of the corporation or enhances the value of its property. (Section 1i)
    - Exercise the general powers mentioned in the Corporation Law, insofar as they are not inconsistent with this Decree. (Section 1j)

Board of Directors
- The corporation is governed by a Board of Directors composed of: (Section 2)
    - Secretary of National Defense
    - Chief of Staff of the Armed Forces of the Philippines
    - President of the PEFTOK Veterans Association, Incorporated
    - Six other persons designated by the President of the Philippines from a list of qualified PEFTOK veterans

Capital Stock
- The capital stock of the corporation is four million pesos (P4,000,000.00) divided into four hundred thousand (400,000) common shares with a par value of ten pesos (P10.00) each. (Section 3)
- At least 51% of the capital stock shall be fully subscribed by the government of the Republic of the Philippines for and in behalf of the PEFTOK veterans. (Section 3)
- An amount of two million one hundred ninety eight thousand and three hundred sixty pesos (P2,198,367.00) shall be initially paid and transferred to the corporation from the PEFTOK savings under R.A. 573. (Section 3)
- Within three years from the date of the proclamation of this Decree, all shares of capital stock subscribed and held by the government for and in behalf of the PEFTOK veterans shall be transferred to and in the name of PEFTOK veterans. (Section 3)
- A PEFTOK veteran, his widow, or legitimate children shall only be entitled to three common shares. (Section 3)
- After three years from the date of the proclamation of this Decree, the Board of Directors shall determine the number of unsubscribed capital stock available for subscription by PEFTOK veterans. (Section 3)
- The sale or transfer of common shares to a party not a PEFTOK veteran is not allowed under any circumstance. (Section 3)
- Any share may be sold or transferred to the corporation, which shall issue the same to stockholders who are veterans. (Section 3)
- No PEFTOK veteran shall be issued a total of more than one hundred shares. (Section 3)

Definition of PEFTOK Veteran
- A PEFTOK veteran is any officer or enlisted man of the Armed Forces of the Philippines, active, inactive, or honorably separated from the service, who had served with any unit of the Philippine Expeditionary Forces to Korea (PEFTOK) as duly certified to by the Adjutant General of the Armed Forces of the Philippines. (Section 4)
- For purposes of this Decree, the term "PEFTOK veteran" or "veteran" shall include the widow and legitimate children of a deceased veteran. (Section 4)

Contribution to Assistance Fund
- The corporation shall contribute the amount of five per cent (5%) of its net profit to the ASSISTANCE FUND administered by the Philippine Veterans Assistance Commission created by Presidential Decree No. 244 dated July 12, 1973. (Section 5)

Legal Existence
- The legal existence of the corporation under this Decree shall be for a period of fifty (50) years from and after the promulgation of this Decree. (Section 6)

Effectivity
- This Decree shall take effect upon its approval. (Section 7)