While the new directors representing government-sequestered shares in the food and beverage giant assumed their posts during yesterday’s special stockholders’ meeting, their confirmation will have to wait until the next regular meeting which has been reset from April or May to June this year.
The government, through the Presidential Commission on Good Government (PCGG), failed last year to boot out the Estrada nominees consisting of his brother-in-law Raul de Guzman, movie producer Esperidion Laxa, Benjamin Paulino, Hermogenes Tantoco and Allan Lee due to a technicality.
The PCGG did not meet the deadline for the submission of its list of nominees, enabling Estrada’s protégés to sit at the SMC board for one more year even as he was already deposed by a popular uprising dubbed EDSA II, in January 2001.
Those voted in shortly before the SMC stockholder’s meeting held at Valle Verde Country Club in Pasig City were former Court of Appeals Justice Hector Hofileña, former Presidential Security Group chief Leo Alvez, Channel 7 chairman Menardo Jimenez, former Nestle Philippines chairman Juan Santos and former Nueva Ecija Rep. Pacifico Fajardo.
The PCGG, specifically created to recover alleged ill-gotten wealth of the late strongman Ferdinand Marcos and his cronies, sequestered a 27-percent share bloc in 1986 on the heels of the phenomenal EDSA 1 revolt that toppled the Marcos dictatorship.
In unresolved lawsuits arising from the sequestration, the government insisted that the contested shares were acquired using funds from coconut levies imposed by the Marcos administration on coconut farmers.
Aside from the five seats, two other nominees sit at the SMC board representing investments by the state-run Social Security System and the Government Service Insurance System.
Meanwhile, President Arroyo told a press briefing at the Villamor Air Base in Pasay City that she was mulling privatization of the sequestered SMC shares.
Describing the plan as a "strategic decision," the President said "government should not engage in business."
She added that the impending entry of the Japanese firm Kirin Brewery Co. Ltd. would increase the share’s value.
"So when the government is able to dispose of its shares, then we will have a good price for it again for the benefit of coconut farmers," Mrs. Arroyo said.
She added that the government, however, will have to maintain its control over United Coconut Planters Bank (UCPB) to protect the sequestered shares deposited in the bank owned by SMC chairman Eduardo "Danding" Cojuangco.
For this purpose, Mrs. Arroyo said the government should exercise management control over the bank. "That is why we have to be in business there, at least for a while."
The President indicated that she wants to execute a Supreme Court (SC) decision unlocking the coco levy funds at the UCPB.
She justified the seeming difference in her policy direction insofar as the SMC and UCPB are concerned by saying there was no inconsistency since her main concern is to protect government-held shares in the two companies.
The smooth transfer of the five PCGG board seats in SMC came as a result of an interim agreement forged over the weekend between Cojuangco and the PCGG.
The accord allowed Cojuangco to retain management control over SMC for two more years "without prejudice and subject to the final resolution on the merits of all cases, as well as new cases that may be filed related to the (disputed) SMC shares."
PCGG Chairwoman Haydee Yorac said the government would also have two directors each in SMC’s executive, audit and compensation committees, and one director in the nomination committee, as well as representatives in various SMC subsidiaries. — With Marichu Villanueva