The Land Transportation Franchising and Regulatory Board (LTFRB) has denied the application of Velox Technology Philippines, Inc, a local subsidiary of Indonesian ride-hailing service Go-Jek, to operate as a Transport Network Company (TNC) due to its failure to pass nationality requirements in the country’s foreign ownership laws.
The decision of LTFRB 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-percent Filipino-owned.
In a report submitted by LTFRB, based on the Deed of Absolute Sale of Shares of Stock, only 20.4-percent 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).
Moreover, LTFRB Resolution No. 2019-015 states that 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.
According to Martin Delgra III, Chairman of Land Transportation Franchising and Regulatory Board (LTFRB), the board simply affirmed the Pre-Accreditation Committee’s resolution denying the application of Velox Philippines. “We need to follow the 60-40 requirement of the law for TNCs to operate in the country. Kailangan po natin sumunod sa batas,” said Delgra.
Meanwhile, Undersecretary for Road Transport and Infrastructure Mark Richmund De Leon pointed out that the Department of Transportation (DOTr) has not taken any part in the accreditation process of Velox Philippines, emphasizing it is well within the mandate of the LTFRB to solely decide on such matters.
“The DOTr does not intervene with the decision of the LTFRB during that phase of deliberation. If Velox Philippines wishes to appeal, they can do so before the DOTr, through the Franchising Review Staff,” explained Usec. De Leon.