Supreme Court stops election of new UCPB directors

The Supreme Court (SC) stopped the scheduled stockholders meeting of the United Coconut Planters Bank yesterday afternoon and the election of directors in its 15-man board.

In a single-page resolution, the High Court ordered the government, the Philippine Coconut Producers Federation Inc., and businessman Eduardo "Danding" Cojuangco, Jr. to maintain the status quo before the Sandiganbayan issued its Feb. 28 ruling.

The Supreme Court’s order was granted based on the petition filed by the Office of the Solicitor General the other day.

"The Court resolved to require the parties to maintain the status quo existing before the issuance of the questioned order of the Sandiganbayan," the third division ruled, which referred to the favorable ruling to Cocofed and Cojuangco.

The Sandiganbayan held that Cocofed and Cojuangco, now the chairman and chief executive officer of food and beverage giant San Miguel Corp., can vote their shares in the UCPB board.

But the OSG, representing the Presidential Commission on Good Government, said otherwise, claiming the government holds a 95-percent sequestered stake in the board since the Cocofed-Cojuangco shares were bought from coco levy funds which are public funds.

The resolution, signed by Third Division Clerk of Court Julieta Carreon, also required Cocofed and Cojuangco to file their comments not later than March 12 and scheduled an oral argument on March 14 at 10:30 a.m. at the division’s conference room.

In a 28-page petition, government lawyers said the Supreme Court should uphold the right of the government, through the PCGG, to vote on the sequestered UCPB shares.

Solicitor General Simeon Marcelo urged the SC justices to nullify the order of the Sandiganbayan on Feb. 28 which allowed businessman Eduardo "Danding" Cojuangco to vote the contested shares.

He asked the SC to "annul and set aside the order of the Sandiganbayan allowing private respondents (Cojuangco et al.) to vote the sequestered UCPB shares in the stockholders’ meeting scheduled on March 6, 2001."

The OSG cited a February 1993 ruling of the Supreme Court which upheld the PCGG’s right to vote the UCPB shares, whose acquisition the government said had been sourced from the controversial coconut levy funds, now amounting to more than P100 billion.

They said a similar ruling was also made by the High Court four years earlier (1989) in the case of the Philippine Coconut Producers Federation Inc. and the PCGG where the SC ruled that "coconut levy funds are undoubtedly public in character raised as they were by the State’s police and taxing powers."

The government’s new nominees to the 15-man UCPB board are former SSS chairman Ramon Valencia, banker Octavio Espiritu, Franklin Fuentavella, retired General Leo Alvez and former Justice Hector Hofilena.

Cojuangco, who lost in the 1992 presidential elections, earlier said the PCGG cannot perform acts of strict ownership, like voting shares and electing board members, over the frozen property since it is merely a "conservator" of assets.

Besides, he added, there is yet no sufficient evidence presented by PCGG that the asset were ill-gotten. Thus, the right to vote the shares remain with registered shareholders, he said.

Cojuangco and seven of his firmsm own 154.247 million shares in UCPB, which is equivalent to three to four seats in the board. The firms are ECJ & Sons Agricultural Ent. Inc., Balete Ranch Inc., Christensen Plantation Inc., Lucena Oil Factory Inc., Metroplex Commodities Inc., PCY Oil Manufacturing Inc. and Autonomoous Development Corp.