PHILIPPINE OVERSEAS TELECOMMUNICATIONS CORPORATION (POTC) AND PHILIPPINE COMMUNICATIONS SATELLITE CORPORATION (PHILCOMSAT), VS. VICTOR AFRICA, ERLINDA I. BILDNER, SYLVIA K. ILUSORIO, HONORIO POBLADOR III, VICTORIA C. DELOS REYES, JOHN BENEDICT SIOSON, AND JOHN/JANE DOES.

Ruling

WHEREFORE, and as prayed for in the Motion dated June 3, 1998, which is hereby granted. 1. The foregoing Compromise Agreement dated June 28, 1996 executed by and between the plaintiff and defendant Potenciano T. Ilusorio is hereby approved, the same not being contrary to law, good morals and public policy. The parties thereto are hereby enjoined to strictly abide by and comply with the terms and conditions of the said Compromise Agreement. 2. The complaint as against defendant Potenciano T. Ilusorio only in the above-entitled case No. 0009 is hereby dismissed. 3. The Motions for Injunction and Contempt, respectively, filed by defendant Potenciano T. Ilusorio against the Government/PCGG, its officers and agents, in Civil Case No. 0009 are hereby withdrawn; 4. The Third-Party Complaint and the Cross-Claim of defendant Potenciano T. Ilusorio are hereby dismissed; and 5. The Board of Directors, President and Corporate Secretary of the Philippine Overseas Telecommunications Corporation are hereby ordered to issue the corresponding stock certificates to, and in the names of Potenciano T. Ilusorio, Mid-Pasig Land Development Corporation, and Independent Realty Corporation, respectively. [13] The result was the redistribution of the POTC shareholdings as follows: Owner % of Shareholdings Ilusorio, Africa, Poblador, Benedicto and Ponce Enrile Families 51.37% PCGG (IRC and Mid-Pasig) 34.94% Nieto Family 13.12% Elizalde Family 0.57% Total 100.00% The Ilusorio Familys shareholding became 18.12%, while that of the PCGG (through IRC and Mid-Pasig) was reduced to 34.94%. With its reduced shareholdings, the PCGGs number of seats in the POTC Board settled at only two. The Ilusorio Family continued its alliance with the Africa, Poblador, Benedicto and Ponce Enrile Families. In effect, the compromise agreement tilted the control in POTC, PHILCOMSAT and PHC, such that the alliance between the Nieto Family and the PCGG, theretofore dominant, became the minority. [14] After assuming the Presidency in mid-1998, President Estrada nominated through the PCGG Ronaldo Salonga and Benito Araneta, the latter a nephew of Nieto, Jr., to the POTC Board of Directors to represent the IRC and Mid-Pasig shareholdings. [15] As to the PHILCOMSAT Board of Directors, however, President Estrada through the PCGG nominated four nominees, namely: Salonga, Araneta, Carmelo Africa and Edgardo Villanueva. The nomination of the four ignored the reduction of the IRC and Mid-Pasig shareholdings in POTC that should have correspondingly reduced the board seats in PHILCOMSAT that the PCGG was entitled to from four to only three. [16] On August 16, 1998, Mid-Pasig, represented by Salonga, filed in the Sandiganbayan in Civil Case No. 009 a Motion to Vacate the order dated June 8, 1998 approving the compromise agreement. On October 2, 1998, IRC, also represented by Salonga, filed a similar motion. Both motions insisted that the compromise agreement did not bind Mid-Pasig and IRC for not being parties