SC: Danding’s UCPB shares belong to gov’t

MANILA, Philippines - The shares that tycoon Eduardo “Danding” Cojuangco Jr. holds in the United Coconut Planters Bank (UCPB) belong to the government, the Supreme Court (SC) has ruled.

In a decision released yesterday, the SC dismissed Cojuangco’s petition questioning the Sandiganbayan’s ruling in July 2003  that the shares are part of assets illegally acquired from coconut levy funds.

“The (UCPB shares) transferred to defendant Cojuangco are hereby declared conclusively owned by the Republic of the Philippines, to be used only for the benefit of all coconut farmers and for the development of the coconut industry, and ordered reconveyed to the government,” read the SC ruling penned by Associate Justice Presbitero Velasco Jr.

Eight other justices concurred in the full-court ruling last Nov. 27. Six others took no part in the voting.

The SC held that the Sandiganbayan was correct in voiding the May 25, 1975 deal in which the Philippine Coconut Administration (PCA) transferred to Cojuangco by way of compensation 10 percent of the 72.2 percent First United Bank (now UCPB) shares of stocks that the PCA had purchased from his uncle, Pedro Cojuangco, using the coconut levy funds.

The SC said Cojuangco in effect received public assets with a value then of P10.88 million, considering his admission that the PCA paid the entire acquisition price for the 72.2 percent shares out of the Coconut Consumers Stabilization Fund (CCSF).

“Consequently, Cojuangco cannot stand to benefit by receiving, in his private capacity, 7.22 percent of the FUB shares without violating the constitutional caveat that public funds can only be used for public purpose,” read the SC ruling.

“Accordingly, the 7.22 percent FUB (UCPB) shares that were given to Cojuangco shall be returned to the Government, to be used ‘only for the benefit of all coconut farmers and for the development of the coconut industry’.”

The SC upheld the anti-graft court’s ruling declaring the government as owner of the 72.2 percent shares of UCBP that the PCA had acquired using coconut levy funds.

“The UCPB shares of stock of the alleged fronts, nominees and dummies of defendant Eduardo M. Cojuangco, Jr. which form part of the 72.2 percent shares of the FUB/UCPB paid for by the PCA with public funds later charged to the coconut levy funds, particularly the CCSF, belong to the plaintiff Republic of the Philippines as their true and beneficial owner,” read the SC ruling.

In 2003, the Sandiganbayan ruled that the PCA’s use of coconut levy funds to purchase the 72.2 percent of UCPB in 1975 was illegal.

The SC said Presidential Decree 755 that PCA cited as authority for the use of the Coconut Consumers’ Stabilization Fund (CCSF), was never published and hence “did not acquire binding force.”

“We cannot, therefore, extend to the said agreement the status of a law. Consequently, we join the Sandiganbayan in its holding that the PCA-Cojuangco Agreement shall be treated as an ordinary transaction between agreeing minds to be governed by contract law under the Civil Code,” read the SC ruling.

P.D. 755 allowed the PCA to enter into an agreement for the acquisition of a commercial bank for the benefit of the coconut farmers.