UCPB assures shareholders on court plea re SMC stocks

MANILA, Philippines - United Coconut Planters Bank (UCPB) has reiterated its stance to continuously protect the interest of the bank and its shareholders, including over three million coconut farmers, who own some P14 billion worth of funds lodged in escrow at UCPB.

UCPB corporate secretary Ildefonso Jimenez made this assurance amid misconceptions on the bank’s petition seeking declaratory relief now pending before the Supreme Court.

Jimenez said the declaratory relief seeks to clarify from the courts the 11 percent interest of UCPB in the proceeds of the redemption of the San Miguel Corp. (SMC) preferred shares.

“UCPB is doing this because it made direct investments to the CIIF (Coconut Industry Investment Fund)Oil Mills which in turn owned the SMC shares. This action will preserve and protect the shareholder value of UCPB,” he said.

Jimenez said from only P112 million in the early 1980s when UCPB made an 11 percent investment at CIIF Oil Mills, the value of such investment amounted to P8.622 billion as of May 2013.

“UCPB is an asset created by the Coco Levy Fund (CLF). So the government and coconut farmers will ultimately benefit should UCPB’s interest be recognized  by the courts,” he said.

Some militant groups, who identified themselves as coconut farmers’ organizations who have a stake in the CLF, earlier questioned the UCPB’s filing of declaratory relief and hiring the law firm affiliated with one of its board of members, Atty. Nilo Divina.

The groups said there was conflict of interest on the part of Divina being part of the board and at the same time representing the bank in various court cases.

On the other hand, UCPB director Efren M. Villaseñor, who represents the voice of coconut farmers as chairman and founding member of the Quezon Farmers Cooperative and the national president of the Pambansang Koalisyon ng mga Samahan ng mga Magsasaka at Manggagawa sa Niyugan, questioned the credibility of these groups which are apparently misrepresenting the coconut farmers and spreading lies on UCPB.

“We checked on the identities of these groups who are claiming to be part of the coalition of CLF but they are not known. In the first place, we should be listening to the voice of legitimate claimants/coconut farmers before making any statement relating to the fund,” Villaseñor said.

According to Villaseñor, over the years that there have been disputes over the CLF, there were a lot of “bogus” groups claiming their rights over the fund.

The legitimate claimants of the CLF, Villasenor said, should understand that under the SC ruling that the CLF should be treated as a public/trust fund and could not be divided among the farmers.

“This is why we are coming up with various programs where the CLF could be utilized as a public fund,” he said.

Villaseñor said they would also be conducting a national survey to come up with a legitimate list of beneficiaries of the CLF. Next month, he said a National Coconut Convention would be held in Cebu to discuss these programs and plans of CLF claimants.

These programs include: opening up of one million hectares of new land for replanting of coconut of which 500,000 square meters should be accounted for the public and remaining 500,000  by the private sector; the creation of a coconut trading terminal; establishment of a coconut university which will cater to coco farmers’ children and will be dedicated for R&D of coconut produce; engagement of capacity building program; establishment of Coconut  Farmers’ Development Foundation; and creation of a new bank once UCPB is privatized.

There is also a proposal to allot P10 billion of the CLF to fund the rehabilitation of coconut plantation in Leyte and Samar wherein some 33 million coconut trees were destroyed, affecting 250,000 coconut farmers/families.

So far, the only benefits  the farmers are getting out of the CLF is the P25,000 insurance coverage and educational scholarship program for coco farmers’ children.

Based on SC ruling, about 74 percent of the outstanding shares of the bank should benefit coconut farmers. About 23 percent of remaining shares are sequestered by the government and ownership is still being resolved by the government.

To date, the CLF amounts to about P75 billion, of which P58 billion is lodged at Bureau of Treasury (BTr) and P14 billion is in an escrow at UCPB. Some P3 billion is with the PCGG.

On the issue of conflict of interest against Divina, the bank’s corporate governance committee had already looked into possible governance issues and subsequently determined that the requisites to satisfy any conflict of interest challenge were more than adequately satisfied.

Since Divina’s law firm took charge of the UCPB cases in 2012, Jimenez said the bank only paid about P500,000 to the firm.

Moreso, Jimenez said they have also disclosed the professional engagement of Divina to the Bangko Sentral ng Pilipinas in the interest of transparency.

“Divina Law Offices were engaged in two important cases both of which require their expertise in urgent legal representation,” the bank official said.