CPA fire: Case closed… but can it be reopened?

The huge fire that gutted the warehouse of the Cebu International Port (CPA) last July 31 where an estimated P100 million worth of government and private property went up in smoke was ruled as "accidental" by a task force of the Department of the Interior and Local Government (DILG). It was caused by faulty electrical wiring, according to a SunStar report last Wednesday.

If that was the finding of this task force, why then did it say that while it considers the case closed, "it can be reopened if circumstances warrant." Clearly, the task force wasn’t sure of its findings. Because of this statement, my hunch tells me that there is something fishy going on here. Has this task force turned into a "whitewash" committee?

For many years, the CPA had that warehouse and it was never threatened by a fire; after all, a warehouse that big just cannot burn down totally because of faulty wiring. But my worms inside the Bureau of Customs (BOC) tell me that all the records under previous Customs Collector Billy Bibit got lost in that fire. Hmm, at the very least that sounds very suspicious!

Last April 18, we wrote an article in The Freeman asking Mr. Bibit who owned that spanking new BMW 645 Ci with an "8" license plate. A congressman with a brand new luxury sports sedan should be exposed! But I got no reply from Mr. Bibit to our queries and then a few weeks later, the Civil Service Commission (CSC) ousted him from the bureau. Surely the papers for that BMW 645 Ci must have been in the office that was gutted. I’m sure there were other mysterious documents that got also conveniently burned in that fire!

While the task force has made a statement to the press, I would like to see a copy of this report because I would like to see how it came up with this conclusion. My sources also told me that when Mr. Bibit was Customs collector in Subic, a fire also gutted the Customs office there right after he left to take his post in Cebu. Wait! Don’t we see a pattern here? Mind you, I’m not accusing Mr. Bibit of arson. What I’m saying is, I’d like to see the report of this task force why a hundred million bucks of property went up in smoke and this task force wants all of us to take its word hook, line and sinker! No sir, this has only made us curious and curiouser and to dig deeper into this case!

* * *

Last March, we wrote about an article we picked up from SpyBiz about the legal tussle between the Swiss-based Holcim Ltd. which acquired a 51-percent majority ownership of the Union Cement Corp. (UCC, which is now known as Holcim Philippines), but was contested in the Security and Exchange Commission (SEC) by its minority stockholders who believe that Holcim Ltd. should have also included them when it bought UCC.

The SEC, during the time of chairwoman Lilia Bautista, concurred with the request of the minority shareholders, citing the Securities Regulation Code which states, "Any firm planning to acquire at least 15 percent of a listed company with assets of P50 million and with at least 200 stockholders holding a minimum of 100 shares each, is mandated to make a tender offer to all stockholders. The tender-offer rule also applies to parties acquiring 30 percent of a corporation’s stake over a period of 12 months."

Holcim officials thought they could merely buy a simple majority of the shareholders and run the company as they wished… without giving the minority shareholders a hoot! This SEC ruling effectively directs Holcim to buy out the minority shareholders of Union Cement Corp. at P6.40 per share. But this was contested in court by Holcim Phils. on March 8, 2005. Holcim president Paul Callaghan even gave a warning that the SEC ruling could affect the entry of many foreign investors into our country. While we embrace foreign direct investors (FDIs) as among the engines of our economy, it must be said that this should never be at the expense of local businessmen, who will be eased out by giant conglomerates for a mere pittance!

When the SEC came up with that ruling, a lot of our businessmen friends felt relieved that at least our own government regulators have taken the side of local businessmen, especially the small minority shareholders who earlier thought that they had a good investment in Union Cement… only to find out that someone else bought the majority stock and did not want to buy the smaller shareholders, leaving them in the cold.

Last Oct. 24, the Court of Appeals (CA) upheld the earlier SEC decision, saying, "The assailed decision of the SEC is affirmed, and the preliminary injunction issued by the court lifted." That means that Holcim Ltd. must make a tender offer to the minority shareholders if it wanted in or out of UCC. The CA even went further to clarify what the SEC could do saying, "We are nonetheless convinced that the SEC has the competence to render the particular decision it made in this case. A definite inference may be drawn from the provisions of the SRC that the SEC has the authority not only to investigate complaints of violations of the tender-offer rule, but to adjudicate certain rights and obligations of the contending parties and grant appropriate relief in the exercise of its regulatory functions under the SRC."

We don’t know what Holcim Ltd. executives will do as this buyout scheme could reach P6 billion. Let Holcim Ltd. officials cry out all they want and scare foreign investors away. But it is time to send a message to foreign investors that they are welcome in this country to do business for as long as they learn to treat local businessmen fair and square and in my book, minority shareholders aren’t really asking too much.

Again, as we said in our previous article, if Cebuanos are interested in what’s going on in the cement industry, it is due to the fact that Cebu sits on top of the three biggest cement plants in this country… and the famous Apo Cement Company (Apocemco) is now called Cemex, now owned by a huge Mexican conglomerate. Holcim’s entry into the cement business here makes us believe that there is a sinister plan to "cartelize" the cement industry, much like what’s happening to the oil industry.

* * *

For e-mail responses to this article, write to [email protected]. Bobit Avila’s columns can also be accessed through www.thefreeman.com. He also hosts a weekly talk show, "Straight from the Sky," shown every Monday, at 8 p.m., only in Metro Cebu on Channel 15 of SkyCable.