SEC forms committee for Lopez Group case

MANILA, Philippines — The Securities and Exchange Commission (SEC) has started its investigation on the complaints and concerns surrounding the ongoing Lopez family feud as well as the corporations embroiled in the controversies.

As first reported by The STAR, SEC chairperson Francis Lim earlier said a special ad-hoc committee would be formed by the commission “to address all Lopez-related matters.”

In a stock exchange filing yesterday, ABS-CBN Corp. said it received summons from the SEC, which indicated that an ad hoc committee has been formed to investigate on the matters concerning the Lopez Group of Companies.

The SEC has ordered ABS-CBN, some of its key officers and a subsidiary corporation to file their verified answer within 30 days from receipt of the summons.

Federico “Piki” Lopez filed on May 6 a complaint to the SEC against ABS-CBN, The Big Dipper Digital Content & Design Inc., chairman Martin Lopez, president Karlo Katigbak and treasurer and group chief financial officer Ricardo Tan Jr.

The complaint seeks for an urgent investigation for the alleged “systemic fraud, misrepresentation and unabated dissipation” of assets by the company’s top management.

Piki has asked the commission to audit ABS-CBN and investigate its top management for allegedly “squandering tens of billions of pesos of the losing media company’s resources” as well as for violations of the Revised Corporation Code and the Securities Regulation Code.”

“The respondents will respond to the complaint through the proper legal channels in accordance with the applicable laws and rules, in due course,” ABS-CBN said.

Piki earlier claimed that his removal as president of Lopez Inc. was allegedly due to his refusal to infuse P2 billion in reserve funds from Lopez Inc. as fresh capital for the ailing ABS-CBN.

The Lopez family majority voted to remove Piki as president and CEO of Lopez Inc. last February in a five-two board vote, for cause and loss of trust after he allegedly entered into P125 billion deals without any authority from the majority.

The Lopez majority later on issued a statement indicating their openness to a ceasefire, with the board of holding company Lopez Inc. withdrawing its Feb. 27 resolution removing Piki as president and CEO.

The majority said the withdrawal presents an opportunity for the whole family to step back, re-consider their adversarial positions and look for options that are least injurious to the family, the Lopez group and the investing public.

In response, Piki welcomed what appeared to be an olive branch extended by the Lopez family majority, saying that he views the gesture as a possible first step for all parties to finally resolve the issues dividing the family.

Hopes of a potential resolution of the Lopez family feud, however, was short-lived as the family majority last week accused Piki of committing “a horrible deal” after agreeing to pay Prime Infrastructure P50 billion as transaction premium and P25 billion as construction equity in First Gen’s P75-billion deal to buy 40 percent of Prime’s hydropower business.

The 71 percent majority said it found out about the premium, which it dubbed as “scandalous,” only recently from board documents.

In a statement over the weekend, the Lopez family majority again slammed Piki for “filing case while talking peace.”

The majority, representing three branches of the clan, claimed that Piki welcomed peace with his cousins on the same day he filed complaints of indirect contempt against them.

“What he says and what he does are two different things,” they said.

The family majority issued the statement after receiving copies of the complaints against them last Tuesday.

It said the complaint was filed later in the day after Piki said he hoped to see peace in the family on May 28 during annual stockholders’ meeting of First Gen Corp.

“This is Piki double speak. He talks peace and at the same time attacks. We are keeping our options open,” the majority said.

The majority members individually had written First Gen to ask for documents about its hydropower deal with Prime Infrastructure.

In his complaint, Piki said that their declaration in their letters to withhold approval of management and board action about the deal if no documents are provided makes them legally exposed.

Piki’s complaint claimed that the majority violated a preliminary injunction through the letters that were believed to be directed toward the objective of preventing or undermining the recognition, ratification, approval and implementation of First Gen’s approved corporate action involving the Prime Infra transaction.

The majority alleged that Piki was forced to disclose select information about the deal six months late after they came out with press statements about the so-called poison pills that can penalize First Gen, and ultimately its shareholders, as much as P24 billion if Piki and his designees in the company are removed.