MANILA, Philippines — Last Nov. 28, the Sandiganbayan junked the claim of the Presidential Commission on Good Government (PCGG) over 20 percent of San Miguel Corporation (SMC) and upheld the ownership thereof of Eduardo “Danding” Cojuangco Jr. On Nov. 29, the Sandiganbayan affirmed the government’s ownership of 72.2 percent of the United Coconut Planters Bank (UCPB). Justice Diosdado M. Peralta penned both rulings.
Battle for UCPB. In 1975, 72.2 percent of the stocks of the First United Bank (FUB) were sold, through Danding, to the Philippine Coconut Authority (PCA). Though coconut levy funds were used in the purchase, 64.98 percent of the shares were placed in the name of the so-called Coconut Industry Investment Fund (CIIF) companies and “one million coconut farmers,” while the balance of 7.22 percent were registered in the name of Danding. FUB was later renamed UCPB.
Why in Danding’s name? Per his agreement with the PCA dated May 25, 1975, Danding supposedly got the 7.22 percent as “compensation for his personal and exclusive option” to buy the FUB shares and “for performing management services.” In 1986, the PCGG sequestered these 72.2 percent shares for being allegedly ill gotten.
“Republic vs Cocofed” (Dec. 14, 2001) — a decision I penned for the Supreme Court –ruled that, pending the final determination of who were their legal owners, these sequestered shares should be voted by the PCGG (the right to vote, not ownership, was the sole issue here). The Court unequivocally decreed for the first time that “coconut levy funds are prima facie public funds.” Hence, the shares purchased with them were also prima facie government-owned. As a result, control of the bank passed from Danding to the government.
Subsequently, the Sandiganbayan — using the above Supreme Court decision — held in a partial judgment that the UCPB shares in the name of the CIIF belonged to the government. Last Nov. 29, it completed its partial judgment by ruling that the Danding shares were also government-owned.
Battle for SMC. In 1986, the PCGG sequestered the shares registered in the name of the CIIF companies constituting 27 percent of SMC and, separately, those in Danding’s name amounting to 20 percent. In 1998, the Supreme Court held that Danding should be allowed to vote his 20 percent, because of the PCGG’s inability to justify its claim to vote them. Later on, Danding was elected SMC chair.
Subsequently, the Sandiganbayan held that the 27 percent belonged to the government, because it was purchased with levy funds. However, in its recent ruling on Nov. 28, the Sandiganbayan said that the PCGG was not able to prove that the 20 percent was purchased with levy funds; hence, it should remain in Danding’s name.
Danding’s counsel, Estelito P. Mendoza, has repeatedly declared that his client has no claim over the CIIF-held shares, which are in turn represented by the Accra Law Office. Mendoza adds that Danding’s SMC stocks were purchased with borrowed funds that have already been paid by his principal. Thus, they belong to him. Incidentally, because of the issuance of new shares, the government’s 27 percent had been reduced to 24 and Danding’s 20 to 17.
In sum, all the UCPB and SMC shares purchased with coco levy funds were ruled to be government-owned “in trust for the coconut farmers.” Danding’s SMC shares were adjudged to the tycoon since they were not proven to have been bought with levy funds. At present, Danding controls SMC, because the PCGG (which votes the 24 percent) and the other substantial SMC shareholders, like Kirin Beer of Japan, have sided with him in running the food and beverage giant.
Piercing issues. Newsbreak, the digital magazine, is normally accessible through its website. However, its very recent printed “special edition,” with Chief Justice Reynato S. Puno on its cover, raises some piercing issues on the judiciary and the Judicial and Bar Council that I think our activist Supreme Court should not let pass unanswered.
Congratulations to new Supreme Court Justice Teresita J. Leonardo de Castro. Gutsy and brainy, she has chalked up an immaculate and impressive track record.
Unconstitutional. Instead of being discussed ad nauseam, the detention of journalists and the imposition of a curfew after the Peninsula Manila siege should be elevated pronto to the Supreme Court. Given its libertarian streak, its decision is fairly predictable.
Christmas celebrations. “Ádeste Fideles” is a most delightful Christmas musicale. It blended the classical with the popular, producing a unique brew of soothing musicality. Kudos to the Management Association of the Philippines presided over by Ambassador Albert F. del Rosario, Credit Suisse headed by Simon Paterno, the other sponsors (including the Philippine Daily Inquirer) and the Organizing Committee chaired by the indefatigable Eddie H. Yap.
“Fiddler on the Roof” is another way to enjoy the Yuletide. Presented by Repertory Philippines, the play is comparable to the best I have seen in New York and London. My wife Leni bought the most expensive seats at P1,000 ($25), still a bargain because the show is comparable in acting, singing and even production to the Broadway version which sold for 10 times more at $250.
For dance enthusiasts, I say the Annual Ball of the Consular Corps held the other evening was the most elegant hereabouts; the closest one can get to a Viennese ball. Salamat po, US Consul General Richard D. Haynes for inviting Leni and me to sit with you at your Dean’s Table.
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