C06342-2017

SECURITIES AND EXCHANGE COMMISSIONSEC FORM 17-C

CURRENT REPORT UNDER SECTION 17
OF THE SECURITIES REGULATION CODE
AND SRC RULE 17.2(c) THEREUNDER

1. Date of Report (Date of earliest event reported)
Oct 24, 2017
2. SEC Identification Number
PW-364
3. BIR Tax Identification No.
000-270-220-000
4. Exact name of issuer as specified in its charter
VICTORIAS MILLING COMPANY, INC.
5. Province, country or other jurisdiction of incorporation
Negros Occidental, Philippines
6. Industry Classification Code(SEC Use Only)
7. Address of principal office
VMC Compound, J.J. Ossorio St., Brgy. XVI, Victorias City Postal Code 6119
8. Issuer's telephone number, including area code
+63-34-399-3588
9. Former name or former address, if changed since last report
-
10. Securities registered pursuant to Sections 8 and 12 of the SRC or Sections 4 and 8 of the RSA
Title of Each Class Number of Shares of Common Stock Outstanding and Amount of Debt Outstanding
Common 2,742,050,564
11. Indicate the item numbers reported herein
9

The Exchange does not warrant and holds no responsibility for the veracity of the facts and representations contained in all corporate disclosures, including financial reports. All data contained herein are prepared and submitted by the disclosing party to the Exchange, and are disseminated solely for purposes of information. Any questions on the data contained herein should be addressed directly to the Corporate Information Officer of the disclosing party.

Victorias Milling Company, Inc.VMC

PSE Disclosure Form 4-26 - Legal Proceedings References: SRC Rule 17 (SEC Form 17-C) and
Section 4.4 of the Revised Disclosure Rules

Subject of the Disclosure

Case filed against Victorias Milling Company, Inc. (VMC).
Background/Description of the Disclosure

Update on a case filed against VMC.
Name of the court or agency in which the proceedings are pending Court of Appeals – Fourteenth Division
Date Instituted Mar 30, 2017
Docket Number CA-G.R. No 150198
Principal Parties

VMC and Land Bank of the Philippines (“LBP”)
Nature and description of the legal proceedings

On May 16, 2017, VMC reported that on August 27, 1998, Land Bank of the Philippines (LBP) filed a Complaint-in-Intervention with the SEC in the Rehabilitation Case of VMC, where LBP sought to directly enforce against VMC its claim against North Negros Marketing Company, Inc. (“NNMCI”) over a credit line LBP extended to NNMCI. To secure the obligation, NNMCI mortgaged its real properties and executed Deeds of Assignment over certain Refined Sugar Delivery Orders (“RSDOs”) in favor of LBP. The RSDOs were allegedly originally issued by VMC. Despite LBP’s foreclosure of NNMCI's real properties, LBP argued that there remains an obligation in the amount of P187,176,231.40.
Since the alleged loans were incurred by NNMCI, VMC neither received anything nor benefited from the alleged loans.
On March 22, 2016, VMC received a copy of the Order dated March 17, 2016 of the SEC Special Hearing Panel – 1, directing it to deliver the above-mentioned quantity of refined sugar equivalent to intervenor LBP or its duly authorized representative. In case the release of the refined sugar is no longer possible, the SEC Special Hearing Panel 1 directed the Company to pay for the monetary equivalent of the remaining amount of the loan incurred by NNMCI, in the amount as above-mentioned.
Consequently, VMC appealed the decision of the SEC Special Hearing Panel – 1 to the SEC En Banc, which on March 7, 2017, denied the appeal of VMC.
VMC then filed a Petition for Review with the Court of Appeals. VMC raised, among others, the lack of jurisdiction of the SEC in adjudicating and awarding the claims of LBP over NNMCI against VMC.
Since Dao Heng Bank, Inc. (now BDO Unibank, Inc.), also filed a Complaint-In-Intervention with the SEC dated Aug. 17, 1998 for a similar claim of 105,000 bags of refined sugar from VMC, and the said claim has been pending with the Court of Appeals after VMC opposed the same for the same reasons as its opposition on the LBP case, the CA granted VMC’s Motion for Consolidation of the Petition for Review filed against Dao Heng Bank, Inc. and LBP on April 21, 2017.
Hence on October 13, 2017, the Court of Appeals – Twelfth Division, has promulgated a Decision on the consolidated cases, which granted VMC’s Petitions for Review on both Dao Heng Bank, Inc. and LBP.
The Decision dated Oct. 13, 2017 is based on the following grounds, among others:
a. The subject complaints-in-intervention and/or amended complaints-in-intervention filed by Dao Heng Bank (DHB) and Land Bank of the Philippines (LBP) should not have prospered following the issuance of the stay or suspension order by the SEC.
b. The claims of DHB and LBP against VMC cannot be fully settled in the suspension of payment proceedings, which involve the rehabilitation of VMC.
c. The subject complaints-in-intervention and/or amended complaints-in-intervention involve claims that fall outside the statutory and limited jurisdiction of rehabilitation tribunals and are within the jurisdiction of ordinary civil courts.
d. The Regional Trial Court retained jurisdiction over the case previously filed by DHB before the Regional Trial Court of Makati.
e. The proceedings under the SEC are limited by the doctrine that the tribunal being an administrative agency has limited jurisdiction.
The dispositive portion of the Decision dated Oct. 13, 2017 states:
“With Our Decision, the prayer for preliminary injunction and temporary restraining order need not be passed upon anymore.
“WHEREFORE, premises considered, the instant consolidated petitions for review are GRANTED. Accordingly, the assailed SEC En Banc’s Decision dated 29 Nov. 2016 in SEC En Banc Case No. 01-15-353 and the Decision dated 07 March 2017, in SEC En Banc Case No. 04-16-399, are hereby SET ASIDE. The subject complaints in interventions and/or amended complaints-in-intervention filed by respondent DHB and LBP against petitioner VMC are DISMISSED for lack of jurisdiction.
“SO ORDERED.”
The effect(s) on the Issuer's business or operations, if any

None.
Other Relevant Information

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Filed on behalf by:
Name Eva Rodriguez
Designation Compliance and Information Officer