A rebuttal

My interest is in explaining the background of the 120,000 common shares of Maxicare, representing 60 percent of the outstanding stocks, which Banco de Oro (BDO) committed to sell to Antonio Go’s company, Pin-An holdings.

You were right as Maxicare waived its right to buy the shares, that right flowed down to the non-selling stockholders who were given 90 days to match Mr. Go’s offer. That "right of first refusal" was embodied in the Stockholders Agreement signed by the stockholders in 1998, when Cigna invested in Maxicare, however, is about 20 years old.

No one else expressed interest to exercise his right except Mr. Benjamin Santos, Atty. Dindo delos Angeles and myself who were incorporators of the company. It took time for us to arrange financing a purchase of this magnitude (it was not as if we deliberately waited until the last day) so that it was only on December 5, 2007 that we saw Atty. Erlaster Sotto of BDO in his office, who advised us collectively, in a letter dated December 5, 2007 that BDO will "immediately execute" the sale documents covering the offered shares provided that "BDO receives the payment of P176 million in cash or cleared funds at its BDO Savings Account no. 14630-46716-8 with BDO-EPCI Tower 1, Branch (463) in Makati Avenue corner H.V. dela Costa Street, Makati City, on or before 5:00 p.m. of December 5, 2007." Failing to do so, we would be charged a 10 percent penalty.

We thought that was unduly stringent to make it difficult for us to comply. Well, to make the story short, we did comply, BDO acknowledged receipt of payment, and Mr. Sotto, who expressed relief that, finally, this transaction would be over as it has caused him so much stress, was already talking to us of a meeting at the "Sign of the Anvil" where BDO’s nominees to the Maxicare Board would be replaced by our nominees. In fact, a draft of a deed of assignment and a draft of a model resignation letter of the directors was shown to us. Surprisingly, not only it wasn’t over, it was just the start of an unbelievable twist and turn of a deal that should have been short, simple and straightforward!

Mr. Sotto advised us that only Mr. Nestor Tan, BDO’s president, was authorized to sign the sales documents and could we please wait a day or two? That was no problem for us. But after so many days had passed and not even a call from BDO explaining the delay, we got worried. So, we wrote BDO a letter on December 10, reiterating our demand for the execution of the documents. In reply, Aster Sotto told us that they had to wait for BDO’s next board meeting because the authority earlier given to Nestor Tan was to execute the documents to Antonio Go or his holding company, and not to us (first twist!).

On the next day, December 11, BDO advised us about a letter and an unsworn "affidavit" it received form a group of stockholders, led by Dr. Roberto Macasaet, requesting BDO to disqualify us, and so it must refer the letter to senior management and legal counsel of BDO (second twist and a surprise!). Clearly, something was wrong. Dr. Macasaet’s group or the Board of Directors of Maxicare, for that matter, which had no authority to disqualify us in the first place, were disqualifying us on grounds that were flimsy, and therefore, not proper grounds at all.

They have no authority because any dispute with respect to any provision of the Stockholders Agreement has to be resolved by an Arbitration Tribunal in Singapore, as agreed upon by he stockholders. Their grounds were flimsy. First, they claim hat we did not provide them acceptance notice -- which we did, and on time by fax notice to Maxicare and by registered mail to the other stockholders, the same mode that BDO had sent out its sale notice. What was intriguing was that this group of stockholders did not even express any interest at all in exercising their right of first refusal when they received notice of Antonio Go’s offer to buy but suddenly turned vigilant of our procedural compliance with acceptance notice requirements! (I now relate this to BDO Chairman Tessie Coson’s statement when I directly complained to her. She said that the matter is with the Maxicare Board, but to which I replied, "No, the Maxicare Board, has nothing to do with this. It is between you – BDO — as seller, and us, as buyer. We paid you for your shares, and you are still holding our payment but still don’t’ have the shares.")

Second, they claim that the three of us pooled our resources. But what happened was each of us wrote to buy the offered shares but since there would be an oversubscription, we had to divide the offered shares among ourselves. That was not only allowed, it was required in the Stockholders Agreement. Otherwise, the seller would be requiring payment three times the value of what it was selling. Ridiculous!

But more ridiculous was the third claim that if we were allowed to buy the offered shares, the other stockholders’ interests in Maxicare would be diluted! Whoever drafted that letter for them to sign must either be equally ignorant or was fooling them because you don’t have to be an accounting student to know that irrespective of who gets to purchase the offered shares will not affect the others’ interests since no new shares were being issued. In any case, this was no longer an issue when Aster Sotto wrote to us collectively that should we make the payment as instructed, he would immediately execute the documents in our favor.

On the charge of having a conflict of interest, we find it not only preposterous to be so charged for exercising a right provided in the Stockholders Agreement. Since Maxicare, as you pointed out, has waived its right, then against whom were we conflicted? What about those who wrote BDO that we be disqualified, weren’t they conflicted when they participated in the Board meeting because of the position they already took? And Tony Go, wasn’t he the most conflicted of all?

Our purpose in going to court was only to obtain a preliminary injunction in aid of arbitration. It was not to resolve the issue on the validity of the sale of Antonio Go, as that is to be decided by the Arbitration Tribunal in Singapore. We have filed a Petition for Certiorari in the Court of Appeals since the Commercial Court Judge, after making it clear to both parties that the hearing was only for a preliminary injunction, not only denied the preliminary injunction but ruled on the validity of the sale to Antonio Go. (The third twist!)

On Atty. Dindo delos Angeles’ "refusal" to surrender the Stock and Transfer Book of Maxicare to his former Assistant Corporate Secretary, Atty. Martin Samson, I will leave to Dindo to answer. It was the same Martin Samson who went to the Securities and Exchange Commission to secure a second Stock and Transfer Book on the ground that the original "was presumably lost." The SEC has since nullified and cancelled the second book it issued when Atty. Dindo presented to the SEC the "presumably lost" original Stock and Transfer Book. (This is the last turn in the story!)