PNB reverse privatization legal, but no to voting rights for PDIC (DoJ.

Byline: Cecille S. Visto

The Department of Justice (DoJ) has given the government the go signal to undertake a reverse privatization of the Philippine National Bank (PNB) but limited the modes by which the bank could be returned to government's hands.

Justice Secretary Hernando B. Perez, in a legal opinion, said the government could legally acquire PNB convertible bonds by way of debt-to- equity conversion but barred the Philippine Deposit Insurance Corp. (PDIC) from acquiring voting shares on the bank.

At the same time, the DoJ chief said the Department of Finance (DoF) could also legally sell the National Government's 16% stake together with the Lucio Tan Group's 67% combined stake in the bank.

However, this would be subject to a right of first offer and right to match in favor of Mr. Tan.

The setup, he stressed, does not violate the rules on public bidding.

In a seven-page legal opinion promulgated on Jan. 3, Mr. Perez said the PDIC is prohibited …