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COMMISSION, petitioner, vs. On July 6, 2004, the scheduled

UNIVERSAL RIGHTFIELD hearing, URPHI through its Chief
PROPERTY HOLDINGS, INC., accountant, informed SEC why it failed
respondent. to submit the reportorial requirement,
(1) it was constrained to
Petitioner is the Securities and reduce its accounting staff
Exchange Commission (SEC) and due to cost-cutting
Respondent is Universal Rightfield measures; thus, some of
Property Holdings, Inc. (URPHI). the audit requirements
were not completed
URPHI is a corporation duly registered within the original
and existing under Philippine Law timetable;
which is engaged in the business of
providing residential and leisure- (2) its audited financial
related needs and wants market. statements for the period
ending December 31,
On May 29, 2003, SEC issued an Order 2003 could not be
revoking URPHI's Registration of SEC finalized by reason of the
for failure to timely file its Year 2001 delay in the completion of
Annual Report and Year 2002, 1st, 2nd, some of its audit
and 3rd Quarterly Reports which requirements.
required pursuant to Section 17 of the
Securities Regulation Code (SRC). On July 27, 2004, SEC suspended
URPHI's registration of Securities and
On October 16, 2003, URPHI Filed a Permit to Sell Securities to the public
motion to set aside the revocation for failure to submit the reportorial
order and reinstate registration after requirements DESPITE THE LAPSO OF
complying with its reportorial THE EXTENTION PERION, and due to
requirements. lack of sufficient justification.

On October 24, 2003, SEC granted the On August 23, 2004, SEC informed
motion to lift the revocation order. URPHI that it failed to submit its 2004
2nd Quarter Report in violation of the
However, URPHI failed again to comply amended IRR of the SRC Rule 17.a
with the same reportorial (1)(A)(ii). It directed URPHI to file the
requirements. said report and show cause why it
should not be held in violation for the
On June 24, 2004, in a NOTICE OF said rule.
HEARING, SEC directed URPHI to show
cause why its registration of Securities On September 23, 2004, URPHI
and Certificate of Permit to Sell requested for a final extension or until
securities to the Public should not be November 15, 2004.
suspended for failure to submit said
requirements in violation of SRC Rule On December 1, 2004, URPHI filed with
17. SEC its 2003 Annual Report.
and the registration of the
On December 8, 2004, SEC revoked security thereunder after
URPHI's Registration of Securities and due notice and hearing by
Permit to Sell Securities to the Public issuing an order to such
for its failure to submits its reportorial effect, setting forth its
requirements within the final extension findings in respect
period. thereto, if it finds that:

On December 9, 10 and 14, 2004, a) The issuer:

URPHI finally submitted to the SEC its xxx xxx xxx
Quarterly Reports.
(ii) Has violated any of the
URPHI appealed the SEC Order of provisions of this Code,
Revocation dated December 8, 2004 by the rules promulgated
filing a Notice of Appeal and a pursuant thereto, or any
Memorandum both dated January 3, order of the
2005. Commission of which the
issuer has notice in
On December 15, 2005, SEC denied connection with the
URPHI's appeal through a resolution. offering for which a
registration statement
Aggrieved, URPHI filed a petition for has been filed;
review with the CA.

Issue: 54.1. If, after due notice

and hearing, the
Whether or not the URPHI was Commission finds that:
accorded all the opportunity to be (a) There is a violation of
heard and comply with all the this Code, its rules, or its
reportorial requirements before the orders; (b) Any registered
Order of Revocation was issued by SEC. broker or dealer,
associated person thereof
Held: YES. SC granted the petition as has failed reasonably to
meritorious stating that there is no supervise, with a view to
dispute that the violation of reportorial preventing violations,
requirements under Sec 17.1 of the another person subject to
Amended IRR of the SRC is a ground supervision who commits
for suspension or revocation of the any such violation;
registration of securities pursuant to
Sec 13.1 and 54.1 of the SRC to wit: (c) Any registrant or other
person has, in a
13.1. The Commission registration statement or
may reject a registration in other reports,
statement and refuse applications, accounts,
registration of the records or documents
security thereunder, or required by law or rules to
revoke the effectivity of a be filed with the
registration statement Commission, made any
untrue statement of a The due notice of revocation given to
material fact, or omitted URPHI through the SEC Order dated
to state any material fact July 27, 2004, wherein the SEC
required to be stated expressly warned that such registration
therein or necessary to would be revoked should it persistently
make the statements fail to comply with the said
therein not misleading; requirements. Still, URPHI continuously
or, in the case of an failed to submit the required reports.
underwriter, has failed to Due notice simply means the
conduct an inquiry with information must be given or made to
reasonable diligence to a particular person or to the public
insure that a registration within a legally mandated period of
statement is accurate and time so that its recipient will have the
complete in all material opportunity to respond to a situation or
respects; to allegations that affect the
individual's or public's legal rights or
or (d) Any person has duties.
refused to permit any
lawful examinations into Furthermore, the SC notes that SEC
its affairs, it shall, in its has both regulatory and adjudicative
discretion, and subject functions. The revocation of
only to the limitations registration of securities and permit to
hereinafter prescribed, sell them to the public is not an
impose any or all of the exercise of the SEC's quasi-judicial
following sanctions as power, but of its regulatory power.
may be appropriate in
light of the facts and The case used by URPHI which is the
circumstances: Globe Telecom ruling is different from
the case at hand. The SC in Globe Case
(i) Suspension, or ruled that the fined imposed by the
revocation of any NTC without notice and hearing was
registration for the null and void due to the denial of
offering of securities; petitioner's right to due process. The
revocation of URPHI's registration of
SC further held that the essence of due securities and permit to sell them to the
process is simply giving an opportunity public cannot be considered a penalty
to be heard, or as applied to but a withdrawal of a privilege, which
administrative proceedings, an regulatory power the SEC validly
opportunity to explain one's side or an exercised after giving it due notice and
opportunity to seek a reconsideration opportunity to be heard.
of the action or ruling complained of.

What the law prohibits is not the Thus, petition is granted and the
absence of previous notice but the decision of CA is reversed. The
absolute absence thereof and the lack requirements of due notice and hearing
of opportunity to be heard. under Section 13.1 and 54.1 of the SRC
were substantially complied with.