(Eagle News)–The Land Transportation Franchising and Regulatory Board has rejected the application of Indonesian ride-hailing firm Go-Jek to operate as a transport network company in the Philippines.
In a statement, the Department of Transportation said it rejected the application of Velox Technology Philippines Inc. “for failure to pass nationality requirements in the country’s foreign ownership laws.”
Velox Philippines is a local subsidiary of Go-Jek.
According to the LTFRB, the Pre-Accreditation Committee of the LTFRB saw that based on the Deed of Absolute Sale of Shares of Stock, “only 20.4% of the 1.2 billion common shares of Velox Philippines’ parent company, Velox South-East Asia Holdings Pte. Ltd. (Velox SEA), was actually sold to local shareholder Pace Crimson Ventures Corporation (PCVC).”
“Further, based on LTFRB Resolution No. 2019-015, Velox Philippines also failed to present necessary documents such as Proof of Payment Capital Gains Tax (CGT) and Proof of Payment of Subscribed Shares allegedly subscribed by its shareholder, PCVC,” the LTFRB said.
The LTFRB said its decision was “pursuant to Article XII, Section 11 of the 1987 Philippine Constitution, which states that no franchise, certificate, or any other form of authorization for the operation of a public utility shall be granted to corporations or associations that are not at least 60% Filipino-owned.”
“We need to follow the 60-40 requirement of the law for TNCs to operate in the country. Kailangan po natin sumunod sa batas,” LTFRB chair Martin Delgra said.
According to Undersecretary for Road Transport and Infrastructure Mark Richmund De Leon if Velox Philippines wishes to appeal, “they can do so before the DOTr, through the Franchising Review Staff.”
