Government, Danding set to finalize interim pact on SMC shares

The government and the group of businessman Eduardo Cojuangco are expected to finalize next week an interim agreement to resolve the dispute over the ownership of coco levy fund shares in the San Miguel Corp. (SMC).

Trade and Industry Secretary Manuel Roxas II who heads the government panel said a special stockholders meeting is set on Feb. 27 and the government’s nominees will be named shortly before that date.

Roxas, however, did not disclose the identities of the government nominees in SMC.

According to Roxas, interim agreement, "is being pursued without prejudice to any new cases that the parties may file and subject to the final resolution on the merits of the courts."

The government is trying to ensure that it is represented in all important committees such as executive committee, audit, compensation and nominations committees.

Government also expects to be represented in all SMC subsidiaries such as Coca-Cola, Pure Foods and Cosmos.

Securing representation in all SMC committees will ensure that government is made aware of any decisions and transactions that SMC may enter into that could affect government’s stake in the food conglomerate.

Roxas said that based on the agreement, government would get five board seats in SMC representing the Coconut Industry Investment Fund (CIIF) holding companies, one seat representing the Government Service Insurance System, and one seat representing the Social Security System.

The interim agreement will be in force for two years only.

Roxas, who was tasked by President Arroyo to review the SMC ownership dispute as well the recent partnership with Kirin Brewery of Japan, said the government is also expected to vote in favor of the investment of Kirin in SMC.

There had been earlier suspicion that the Kirin investment may be a ploy to dilute the government’s stake in SMC.

Government is consolidating its hold on SMC. Government representatives to the SMC board are still those nominated by deposed President Estrada. The five nominees have refused to vacate their position.