No plan to oust Pangilinan from PLDT, MPC - First Pacific

Hong Kong-based First Pacific Co. Ltd. (FPC) has no plans of removing its executive chairman Manuel V. Pangilinan as president of the Philippine Long Distance Telephone Co. (PLDT) and of Metro Pacific Corp., which owns Bonifacio Land.

But even if it wants to, First Pacific may not be able to do so for two reasons: It cannot legally do so and removing him from his Philippine posts might create more problems than solutions, highly placed sources explained, yesterday.

STAR sources revealed that the PLDT board remains unanimous in its support for Pangilinan and the existing management. One way Pangilinan can be removed is if First Pacific replaces its nominees in the board during next year’s stockholders’ meeting or in a special stockholders’ meeting and board election. But even if First Pacific’s nominees are removed from the board, there are those who say that Pangilinan still has the support of the non-First Pacific nominees.

Removing Pangilinan as president of PLDT can also backfire. The shareholders’ agreement between First Pacific and Antonio O. Cojuangco (when the Cojuangco family sold part of its shares in the Philippine Telecommunications Investment Corp. or PTIC to First Pacific) has a ‘side agreement’ which will allow Cojuangco to exercise his right of first refusal over First Pacific’s shares in PTIC if Pangilinan is removed from PLDT.

Even in Hong Kong, certain members of the First Pacific board who want Pangilinan ousted as executive chairman are in a quandary as to how to get him out considering that the replacement of the FPC chairman needs a unanimous vote and right now, there are members of the board who remain loyal to Pangilinan.

The First Pacific board is composed of Pangilinan as executive chairman, three executive directors namely Michael Healy, Ronald Brown and Eduard Tortorici, four Indonesians who are non-executive directors- Sutanto Djuhar, Tedy Djuhar, Ibrahim Risjad, and Anthoni Salim, and three independent directors.

Even if only one or two directors support Pangilinan, any move in the board to have him removed as executive chairman of First Pacific will not succeed since such a move will need the approval of all directors, sources explained.

In an interview, First Pacific spokesperson Rebecca Brown said rumors about the company’s alleged plan to oust Pangilinan from his posts in the Philippine subsidiaries are ‘silly.’

A news report (not The STAR) said that First Pacific will oust its chairman from posts in two Manila units so the Hong Kong-based company can proceed with plans to sell control of PLDT and Boni Land. to tycoon John Gokongwei (which Pangilinan has opposed) in order to meet a Sept. 30 deadline for the sale valued at $925 million. The report said an announcement will be made by First Pacific on the matter in the next three days.

"That is a silly rumor. There is no Sept. 30 deadline. The memorandum of agreement continues. What expires on Sept. 30 is the exclusivity period, but the reality is we don’t have any other offer," Brown said.

As president and chief executive officer of PLDT, Pangilinan has joined other members of its board (including PLDT chairman Antonio O. Cojuangco) in opposing First Pacific’s plan to sell its 24.4 percent interest in PLDT to the Gokongwei Group.

Last June 4, First Pacific, initiated by its majority shareholder Anthoni Salim, entered into a MOA with the Gokongwei Group to sell its 24.4 percent share in PLDT and 50.4 percent stake in Bonifacio Land Corp. to a joint venture company that will be participated in by First Pacific (one-third) and by the Gokongwei Group (two-thirds).

Under the agreement, the two parties have until Sept. 30 to complete the transaction and comply with all the conditionalities agreed upon, including the conduct of due diligence investigations by the Gokongwei Group on PLDT and Boni Land to be facilitated by First Pacific, among others.

With 20 days remaining before the so-called exclusivity period (which prevents First Pacific from entertaining other offers to buy) expires, the Gokongwei group has yet to conduct due diligence investigations of both PLDT and Boni Land which is a necessary precondition for the sale transaction to be completed. The PLDT board said it will not allow any due diligence to be conducted.

"Shareholders appointed him to his posts. Certainly, the position of PLDT’s board in not allowing due diligence impinged on the process, but there are other ways and means to get this transaction done," Brown added.

In a statement, PLDT spokesperson and vice-president Butch Jimenez clarified that "only the PLDT board can initiate actions to remove Mr. Pangilinan from his position as president and CEO."