PCGG admits difficulty wresting control of San Miguel

The Presidential Commission on Good Government (PCGG) admitted yesterday that it was having difficulty in its bid to wrest control of San Miguel Corp. (SMC) from businessman Eduardo Cojuangco.

"It’s going to be very difficult to take over control of San Miguel because we control only 27 percent of the votes," PCGG Chairman Haydee Yorac told reporters in a press briefing.

SMC will hold its general stockholders’ meeting on April 20 to elect directors to the corporation’s 15-seat board.

However, Yorac said the government is still not giving up on the move to gain control of the food and beverage conglomerate and is waiting for independent shareholders to decide on whether or not they will join the government.

"We have five nominees but, as I said, there’s the prospect of independent people interested in joining the government," she said.

Yorac admitted that Filipino-Chinese shopping mall magnate Henry Sy is one of the independent SMC shareholders eyed by the government as possible allies, adding that she has asked the government to talk to Sy.

She said the government is pursuing these efforts to wrest control of SMC with an eye to eventually selling its stake in the international market.

The government, she said, "is pursuing San Miguel simply because the government thinks that it owns the majority of the stock holdings," she said. "But if this issue is settled finally, once and for all, government should sell at an international open fair bidding so the funds could be used for the benefit of coconut farmers."

The government is assured of five nominees to the SMC board by virtue of the 27 percent stake it holds in the sequestered company.

The PCGG has also sequestered an additional 20 percent of SMC, but the votes for this stock percentage are held by Cojuangco.

Cojuangco is a respondent in several civil and criminal cases filed against him by the PCGG and the government for alleged misuse of coconut levy funds collected during the 20-year regime of strongman Ferdinand Marcos.

The government sequestered an aggregate 47 percent of SMC shares allegedly bought by Cojuangco using money from the Coconut Industry Investment Fund (CIIF), commonly called the coconut levy fund, and funds from the United Coconut Planters Bank (UCPB).

The government controls two other SMC board seats held by the Government Service Insurance System (GSIS) and the Social Security System (SSS).

The PCGG and Cojuangco entered into a two-year interim agreement in February 2002 to show unity to Kirin Brewery, which had just purchased 15 percent of SMC.

The agreement, which lapsed on Feb. 21, bound the government not to oppose Cojuangco’s chairmanship of the SMC board.

Earlier reports said the shareholders’ agreement with Kirin allows Cojuangco first right to purchase Kirin’s SMC shares if the Japanese firm sells out after five years. There is also a provision in the agreement that Cojuangco and Kirin will vote as a bloc on management decisions.

Cojuangco votes on 20 percent of SMC shares, equivalent to three board seats, and reportedly has three management nominees under his control.

PCGG commissioner Ruben Carranza said SMC management has yet to respond to their request for the turnover of five percent in treasury shares in compliance with a Supreme Court ruling that the shares rightfully belong to the government.