Facts:

Union Cement Corporation (UCC), a publicly-listed company, has two

principal stockholders namely UCHC, a non-listed company, with shares
amounting to 60.51%, and petitioner Cemco the petitioner with
17.03%. Majority of UCHCs stocks were owned by BCI with 21.31% and ACC
with 29.69%. Cemco, on the other hand, owned 9% of UCHC stocks. A
disclosure letter was given to the Philippine stock exchange (PSE) informing
them that a resolution to sell stocks of BCI and ACC to Cemco in UCHC
amounting to 21.31% and 26.69% respectively. Subsequently the acquisition
of Cemco of the shares in UCHC total beneficial ownership resulted to an
increase of 36% in UCC and at least 53% of the shares of UCC. PSE then
submitted a letter to SEC questioning whether the Tender Offer Rule under
Rule 19 of the Implementing Rules of the Securities Regulation Code is not
applicable to the purchase of Cemco of the majority of shares of UCC. In
response to the letter of PSE to the SEC Director of Corporate Finance Justina
Callangan, Tender Offer Rule was not applicable and Cemcos transaction
was not covered by the rule. National Life Insurance Company of the
Philippines, Inc., the respondent and a minority stockholder of UCC felt
aggrieved and sent a letter to CEMCO demanding the latter to with the
Tender Offer Rule. Cemco, however, refused. Thereafter, a Share Purchase
Agreement was executed by ACC and BCI, as sellers, and Cemco, as buyer
subsequently the transaction was consummated and closed. Respondent
filed a complaint with the SEC to reverse its resolution and aver the purchase
agreement void and prayed for the application of the Tender Offer Rule to its
UCC shares. SEC then required Cemco, UCC, UCHC, BCI and ACC to comment
on the complaint and all were uniformed in arguing that the tender offer rule
applied only to a direct acquisition of the shares of the listed company and
did not extend to an indirect acquisition arising from the purchase of the
shares of a holding company of the listed firm. SEC ruled in favor of the
respondent by reversing and setting aside its Resolution and directed
petitioner Cemco to make a tender offer for UCC shares to respondent and
other holders of UCC shares similar to the class held by UCHC pursuant to
Section 9, Rule 19 of the Securities Regulation Code. Subsequently petitioner
filed a petition with the Court of Appeals challenging the SECs jurisdiction to
take cognizance of respondents complaint and its authority to require
Cemco to make a tender offer for UCC shares, and arguing that the tender
offer rule does not apply, or that the SECs re-interpretation of the rule could
not be made to retroactively apply to Cemcos purchase of UCHC shares. The
COA affirmed the decision of SEC and that SEC has jurisdiction over the
matter therefore, Implementing Rules applies to Cemcos purchase of UCHC
stocks. Cemco filed a motion for reconsideration which was denied by the
Court of Appeals. Hence, the instant petition.

ISSUE
1. Whether or not the SEC has jurisdiction over respondents
complaint and to require Cemco to make a tender offer for
respondents UCC shares.
2. Whether or not the rule on mandatory tender offer applies to the
indirect acquisition of shares in a listed company, in this case,
the indirect acquisition by Cemco of 36% of UCC, a publicly-listed
company, through its purchase of the shares in UCHC, a nonlisted company.
3. Whether or not the questioned ruling of the SEC can be applied
retroactively to Cemcos transaction which was consummated
under the authority of the SECs prior resolution.
HELD
1) Yes, SEC has jurisdiction over respondents complaint in accordance to Rule
19(13) of the Amended Implementing Rules and Regulations Code and
Section 5.1 of the SRC which allows a general grant of adjudicative powers to
the SEC. The Adjudicative powers of SEC is implied from the express power
of the commission or which is incidental to or reasonably necessary to carry
out to the performance of the administrative duties entrusted to it. It has the
incidental power to conduct hearings and render fixing decisions. Petitioner
also did not question the jurisdiction of the SEC when it rendered opinion
favourable to it. It was only when the case was before the Court of Appeals
and SEC rendered an unfavourable judgment against it that petitioner
challenged the competence of SEC.
2) Yes, it applies. Tender offer is publicly announced intention by a person
acting alone or in concert with other persons to acquire equity securities of
public company. Tender is in place to protect minority shareholders against
any scheme that reduces the share value of their investments. It gives the
minority shareholders the chance to exit the company under reasonable
terms, giving them the opportunity to sell their shares at the same price as
those of majority shareholders.

3) The actions of the SEC on the PSE request for opinion on the Cemco
transaction cannot be construed as passing merits or giving approval to the
inquired transaction. The draft letter of Director Callanga was nothing but an
approval of the draft letter of SEC. No public hearings where the parties
involved were held, the letter was merely an advisory. Thus, the ruling of SEC
dated February 14 2005 should be applied in the present case abandoning
the opinion embodied in the letter dated July 27 2004.