Corporate stakeholders may be allowed to inspect records

The Securities and Exchange Commission (SEC), the corporate regulator, is pushing for ways to allow stakeholders to inspect records of corporations.

The SEC, in particular, is finalizing the guidelines that would affirm the right of directors, trustees, stockholders and members to inspect the records of their corporations.

In a draft memorandum circular dated June 23, the SEC said corporate records, regardless of the form in which they are stored, shall be open to inspection by any director, trustee, stockholder or member of the corporation.

The circular, or the Guidelines in Conducting Investigations of Violations of the Right to Inspect and/or Reproduce Corporate Records, has been released for public comment.

“The director, trustee, stockholder or member may inspect the corporate records in person or through a representative at reasonable hours on business days, as well as demand in writing and at his/her expense for copies of such records,” the SEC said in the draft circular.

The SEC said outright refusal to allow the director, trustee, stockholder, or member of the corporation, to peruse any of the corporate records in person, or by a representative will be considered a violation of the guidelines.

Other violations include failure to take the necessary steps that would allow the director, trustee, stockholder, or member of the corporation, to peruse any of the corporate records in

person, or by a representative or failure to allow the said stakeholders to reproduce any of the corporate records.

At present, the Revised Corporation Code further provides that an aggrieved party may report the non-compliance of a corporation to the SEC and, within five days from receipt of such report, the commission shall conduct a summary investigation and issue an order directing the inspection or reproduction of the requested records.

“Any officer or agent of the corporation who shall refuse to allow the inspection and/or reproduction of records in accordance with the Revised Corporation Code shall be liable to the requesting party for damages and, in addition, shall be guilty of an offense punishable under the law,” the SEC said.

An aggrieved party may file a verified report with the SEC Company Registration and Monitoring Department (CRMD), or any of the SEC extension offices.

The SEC may impose any or all of the sanctions under Section 158 of the Revised Corporation Code, taking into consideration the extent of participation, nature, effects, frequency and seriousness of the violation.