In a 66-page resolution penned by first division chairman Teresita Leonardo de Castro, the anti-graft court granted the motion filed in 2003 by the Presidential Commission on Good Government (PCGG) for partial summary judgment on the controversial shares of the government in the food and beverage giant.
De Castro, Diosdado Peralta and Francisco Villaruz said the funds used to buy the SMC shares "belong to the government" and are "held in trust for all the coconut farmers."
They also ruled that the shares must be "reconveyed to the government."
"The CIIF companies, having been acquired with public funds, the 14 CIIF-owned holding companies and all their assets, including the CIIF block of SMC shares, being public in character, belong to the government," it added.
A trial will nevertheless be held, especially in the light of questions whether the government owns 27 percent of the company or 31.3 percent as estimated by SMC lawyers.
The decision, however, did not cover the 20 percent block, which the government confiscated from SMC chairman Eduardo "Danding" Cojuangco.
Cojuangco said he used his own money and personal loans to purchase his 20 percent share. But the government argued that Cojuangco used part of the coconut levy to buy the 20 percent block for himself and the CIIF shares belonged to the government because the levy was a government tax.