Non-declaration of dividends not illegal, Sara Duterte’s camp points out

The camp of Vice President Sara Duterte pointed out on Tuesday that a corporation’s non-declaration of dividends is neither illegal nor prohibited under the Revised Corporation Code of the Philippines. Defense lawyer Justin Nicol Gular cited the law during his cross-examination of a prosecution witness from the Securities and Exchange Commission (SEC) who was testifying on company registration. Gular invoked Section 101 of the Corporation Code when he asked the SEC witness to present evidence that would consider the non-declaration of dividends as an illegal act. The section grants the board of directors the power to decide whether to declare dividends. This statement comes amid discussions on corporate governance and investor protection in the Philippines, particularly concerning the extent of a company's obligation to return profits to shareholders. Transparency in corporate governance and the protection of shareholder rights remain significant issues in the Philippines, and the Vice President's camp's stance could influence future legal interpretations and corporate practices.