Cosmos sale to San Miguel hits snag

The owners of 10 Visayas-based companies which were bought by Cosmos Bottling Corp. have moved to stop the sale of Cosmos to San Miguel Corp.

In a petition filed before the Quezon City Regional Trial Court, Augusto L. Syjuco Jr., representative of the owners of the 10 companies, asked the RTC to issue a temporary restraining order and a writ of preliminary injunction against Cosmos Bottling Corp. to stop the sale of Cosmos to SMC.

Syjuco, who represents Iloilo in Congress, also asked the court to rescind the contract of sale of the 10 companies to Cosmos Bottling Corp.

It will be recalled that on Nov. 8, 1996, Syjuco’s group entered into an agreement with Cosmos Bottling Corp. for the sale of their 10 companies to the group of Jose Concepcion Jr. in the amount of P1.168 billion.

The companies bought by Cosmos Bottling Corp. were Jaz Cola Phils., Inc., Jaz Cola Cebu, Inc., Jaz Cola Bacolod, Inc., Jaz Cola Iloilo, Inc., Pacific Bottlers Philippines, Inc., Asia Palstiko, Inc., Pacific Dairy Queen, Inc., Cebu Food and Beverage Resources Inc., Bacolod Food and Beverage Resources, Inc., and Iloilo Food and Beverage Resources, Inc.

All these companies were absorbed by Cosmos Bottling Corp. which was sold to SMC.

Syjuco said that Cosmos Bottling Corp. violated some of the terms of the sale.

He said the P1.16 billion "is not the total consideration of the sale. This is merely a part of the acquisition cost," he said.

He said the total consideration of the sale "includes payment and/or assumption by the defendants of many other obligations."

Syjuco said these include leasing payments, reimbursible truck leases, advances for operating expenses, advertising, insurance and medical costs, separation pay of Manila liaison personnel of Jaz Cola and RC Cola, among others.

Syjuco said "more importantly, the consideration of the sale includes the obligation of the defendants to pay any and all of the direct taxes arising from this sales transaction, including payment for plaintiffs’ own taxable income.

Syjuco said "we were made an unwitting tool by the defendants in an apparent grand scheme to evade the payment of proper tax due the government by whatever means necessary, whether lawful or not."

Syjuco said "the defendant corporations, upon the direction, orders, instructions, knowledge, behest and/or approval of defendants’ de facto head Jose Concepcion Jr. and Jose Ma. Concepcion III and the directors/officers unjustly refused and/or failed to comply with their other obligations" in the sale.

Aside from the two Concepcions, named respondents were Antonio Panahon, Gerardo T. Garcia, Lauro B. Ramos, Felicisimo Nacino Jr., Albert S. Toribio, Raymund B. Azcarate, Ernest Fritz Server and Cristina D. Reyes.

Nuisance suit

Contacted for comment by The STAR, RFM Corp. legal head Cristina D. Reyes said "this is nothing more than a nuisance suit."

"Mr. Syjuco has been fully paid five years ago, and we have all the documents, the checks, the receipts, and even the acknowledgment of his own counsel at that time," Reyes said.

Reyes said the records will show full payment to Syjuco of the full purchase price, plus other obligations that Syjuco had left behind, including bills for raw materials, resins, bottles, spare parts, advertising materials, truck leases and all taxes due on the transaction.

"In fact, an audit of the transaction in 1997 shows that there was even an overpayment to Mr. Syjuco, as certified by the SGV auditor and Emmanuel Rios, the president of Mr. Syjuco’s company at that time," Reyes said.

She expressed confidence that any legal proceeding will prove that Syjuco has no valid claims against Cosmos Bottling Corp. (CBC).

"If you had a valid claim against somebody, why wait for five years to make that claim?" Reyes asked. "It makes you wonder what the real motive is behind the filing of the TRO and injunction, at this time when everyone knows there is a transaction under consideration between CBC and SMC."