Probe of Meralco, Petron 'raid' by San Miguel Corp. sought

MANILA, Philippines - A congressman is urging the Presidential Commission on Good Government (PCGG) to investigate what other lawmakers have described as the “raid” recently conducted by San Miguel Corp. (SMC) on Meralco and Petron.

In Resolution 1024, Quezon Rep. Proceso Alcala said the PCGG should tell the country’s 18 million coconut farmers and their families whether their 27-percent share in San Miguel has been used in the company’s recent spate of “unusual” investments, and if it was used, how its value was affected.

He said the PCGG, together with the Philippine Coconut Authority, is the agency mandated to preserve these assets for coconut farmers.

He said the Sandiganbayan, in a decision on May 10, 2007, has awarded ownership of 27 percent of San Miguel to the farmers.

Alcala pointed out that in addition to the 27-percent stake, which is worth tens of billions of pesos, farmers are claiming ownership of an additional 20 percent of the food and beverage giant.

“Recent reports indicate that SMC has made or is set to make a series of substantial investments which would impact or affect the value of the 27-percent and 20-percent blocks of SMC shares… the number of such substantial investments happening in a short span of time appears unusual,” he stressed.

He added that coconut farmers have the right to know the status of their money.

Alcala belongs to the Liberal Party block in the House.

During martial law, coconut farmers contributed to coconut industry funds through the coconut levy.

Besides billions SMC has invested in Meralco and Petron, Alcala wants other recent investments, investment plans and financial maneuvers the company has made to be made public.

These include its reported interest in acquiring a Bataan power plant, its P48-billion water venture, its sale of 43 percent of San Miguel Brewery to Kirin Beer of Japan, its $1-billion stock offer, its deal with Qatar Telecom, and its stake in Liberty Telecom.

Meralco is the country’s biggest electricity distributor, while Petron is the country’s largest oil refiner-retailer.

Meralco was the darling of stock players last week because of market rumors that Hong Kong’s First Pacific Group, represented here by businessman Manuel V. Pangilinan, has accumulated a substantial number of shares.

Speculations have it that Pangilinan, known in business circles as MVP, is allied with the Lopezes, who run Meralco and who are reportedly girding for a boardroom battle with SMC’s Eduardo Cojuangco Jr. and Ramon Ang.

The Meralco shares SMC has acquired were those of state pension fund Government Service Insurance System (GSIS). MVP was eyeing the same block of shares and reportedly had a deal with GSIS before SMC inexplicably bagged them.

SMC’s acquisition of Petron is in itself a controversial story. Ashmore Group of the United Kingdom bought Saudi Aramco’s 40-percent stake in the oil refiner and then gobbled up the government’s 40 percent in a subsequent deal.

It then turned around and sold the bulk of its Petron stake to SMC.

Ashmore’s representative here is Marcos-era trade minister Roberto Ongpin.

There are reports that the Ashmore-Petron-SMC deal violated securities laws.

Some congressmen are asking why the government did not sell its remaining 40-percent ownership of Petron through public bidding.