The Medical City now has two boards of directors and two CEOs after one faction in the ongoing fight for control of the Pasig-based healthcare institution held a stockholders’ meeting last week, which, according to a rival faction, was held in defiance of a status quo order from government corporate regulators.
The Inquirer learned that the camp of hospital chair Dr. Augusto Sarmiento and its treasurer, Jose Xavier “Eckie” Gonzales, convened a special stockholders’ meeting to wrest control of the hospital from the group of its longtime CEO Dr. Alfredo Bengzon.
Fifteen new directors were elected during the meeting last Thursday evening.
The new board, in turn, named the hospital’s medical director, Dr. Eugenio Ramos, as its new president and CEO to replace Bengzon.
Almost immediately after, however, Bengzon’s camp sent out an e-mail to the hospital’s staff, saying the meeting was held illegally.
Bengzon pointed to an order from the Securities and Exchange Commission (SEC) ordering a status quo pending the resolution of his complaint against Gonzales’ camp for the method by which they acquired a majority stake in the firm that owns the hospital.
Gonzales and his foreign partners—the Fountel, Clermont Group and Lombard funds—have been able to accumulate a combined 54-percent stake in Professional Services Inc. in recent years which, in turn, owns The Medical City.
‘Acting in concert’
But Bengzon alleged that Gonzales failed to declare to the rest of the hospital’s board that he was “acting in concert” with the foreign funds to acquire a majority stake—something that would have triggered a so-called mandatory tender offer to buy out the rest of the stakeholders under the same terms.
The issue remains pending with the SEC.
“The election of a ‘new’ board of directors and the appointment of another chair, CEO and other officers were therefore illegal and without effect,” Bengzon said in his e-mail to the staff, adding that the hospital was “at very real risk” if the new appointees were allowed to exercise any authority or actions.
“I have relieved Mr. Gonzales and Dr. Ramos from their positions as heads of the customer engagement group and medical services group, respectively, effective immediately,” he added.
Fight for control
“We request that you continue to work with the legitimate incumbent board of directors and management, and disregard any directive or order from the faction that is attempting to take over in a hostile, dangerous and illegal manner,” Bengzon said.
The fight for control between both camps also included a dispute over the use of the hospital’s facilities last week, specifically its auditorium.
Town hall meeting
Gonzales’ camp initially called for a town hall meeting to be held at the auditorium last Friday morning, but Bengzon was still using the facility for his own earlier meeting with staffers.
As such, the new board held its town hall meeting outside the auditorium.
“It’s getting confusing here,” said one insider.
Another one added that staffers feel like the hospital is a city hall with two rival mayors claiming to hold rightful legal authority.
The Inquirer learned that only a total of 57 percent of shareholders’ votes were cast during the Gonzales-led special stockholders’ meeting, of which 54 percent is held by Gonzales’ faction.
The rest are doctors who are also owners of the hospital.
Both camps agree that The Medical City needs an equity infusion from a new investor to stabilize its finances.
Gonzales believes that his group is best positioned to take control of the hospital and recapitalize it, while Bengzon wants to bring in the Ayala group as its “white knight.”
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