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Batangas firm in quagmire over bookkeeping, expenses

A top executive and director filed a case before the Batangas City Regional Trial Court to order the management of a fertilizer trading company based in San Pascual, Batangas to open its corporate books and records for inspection amid allegations of illegal company expenses.

In a complaint filed before the Batangas City Regional Trial Court on April 1, 2019, Jesus P. Mangubat, the vice president for finance and accounting, treasurer and director of Ferex Agrochem Development Corporation, asked the court to order company chairman and president Ruben V. Gil and four other executives to make available Ferex’s corporate books and records for examination.

The complainant is also seeking P400,000 in moral damages and P100,000 in attorney’s fees.

Ferex Agrochem Development Corporation is engaged in the business of importing, marketing, distributing and trading agricultural fertilizers and allied goods.

Mangubat filed the case against Ruben Gil, executive assistant, and director Jean Ruben S. Gil, chief accountant Milagros B. Celab, corporate secretary Amado C. Abenes and auditor Merla D. Edolmo.

In his complaint, Mangubat said that “through the years, defendant Ruben began running Ferex as if it were his sole proprietorship” and that the defendant “made decisions without consulting or even against the consent of other directors and stockholders.”

Mangubat alleged that Gil made corporate decisions without any actual board meetings and put down opposition with bullying tactics.

“This eventually led to the departure of other original incorporators leaving only plaintiff and defendant Ruben as original stockholders,” Mangubat said.

Mangubat accused Gil and four other Ferex executives of unauthorized company expenses in violation of Section 72(2) in relation to Section 144 of BP 68 or the Corporation Code of the Philippines.

Mangubat, Gil and a few other friends incorporated Ferex as a dynamic, competitive and leading agricultural fertilizer company in the Philippines. Based on the general information sheet in 2007, Mangabat owned 25 million shares equivalent to 25 percent of the company, while his son Joseph Rafael S. Mangubat had 5 million shares or 5 percent and his wife Marilous S. Mangubat had 2.8 million shares or 2.8 percent, for a total of 32.8 million shares or 32.8 percent. Gil and his family had 65.6 million shares or 65.6 percent.

Mangubat said that five years ago, he lost operational control over Ferex’s finances which were unilaterally and directly managed and controlled by Gil which he shared with subordinates Celab and Edolmo.

Mangubat questioned Gil’s acquisition of two lots with a total area of 7.45 hectares in Barangay Camias, San Miguel, Bulacan and registered in the name of the main respondent’s wife Marina S. Gil and her siblings.

The complainant claimed that Gil caused the development works on the Bulacan property without the board of directors’ approval at the company’s expense. “Respondent Ruben frequented and treated it as a leisure farm, staying there for days on ends,” he said.

Mangubat alleged that the unauthorized development works on the property cost Ferex almost P6 million. 

Mangubat alleged that in May 2018, he also discovered that Gil, in cahoots with Celab and Edolmo “created a so-called personal expense account in the amount of P300,000 that defendant Ruben receives every month”.

“The board of directors never approved this personal expense account in a meeting duly called for the purpose,” said Mangubat.

Mangubat said that with Gil’s unauthorized and unaccounted use and “possibly misappropriation of company funds”, he refused to lend his name, credit and property to the company.

“Seeing plaintiff as a threat to his decades-old rule, defendant Ruben with the aid of his con-defendants began to systematically boot plaintiff out of Ferex,” Mangubat said.

Mangubat said his alleged termination was intended to further prevent him from accessing Ferex’s books of account and record of transactions.”

Mangubat said that despite his repeated demands and the filing of a criminal complaint against Gil and the other executives, “the defendants have to date failed and refused and continue to fail and refuse to allow plaintiff’s inspection of Ferex’s books of account and other corporate records.”

“On the facts and the law, defendants’ refusal to allow plaintiff’s sought inspection is illegal, since there is now lawful ground for it,” Mangubat said.

Topics: Batangas City Regional Trial Court , Jesus P. Mangubat , Ferex Agrochem Development Corporation
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