Love, they say, is lovelier the second time around. Ah, but so is the opposite, it seems.
War is uglier the second time around, and the Lopezes are a testament to this.
The fragile ceasefire between the Lopez majority led by Gabby Lopez and Federico “Piki” Lopez turned out to be short-lived because, as we’re seeing now, the third-generation cousins in Don Eugenio Lopez Sr.’s bloodline have returned to the war zone, trading barbs again, at no benefit to themselves or anyone else except their lawyers and spin doctors.
War of annihilation
In the end, it was a ceasefire that didn’t even last for a month, and the way I see it, this resumption of battle has diminished the prospects for genuine peace among the cousins.
What I see is a war of annihilation. Neither side will stop until the other is destroyed. I am sure the old guards in business would agree with me when I say this would be the last nail in the coffin of the once formidable empire.
The cousins will go down in history as the ones who brought an already dwindling business conglomerate to perdition.
To their credit, it was the Gabby-led faction that extended the olive branch to Piki on May 14 when it decided to withdraw its Feb. 27 resolution removing Piki as president and CEO of Lopez Inc.
ABS-CBN, the flashpoint
Unfortunately for ABS-CBN, the financially troubled media giant is a big part of the bitter feud.
While Gabby’s camp continues to question Piki regarding the deals with Razon-led Prime Infrastructure, Piki has been laser-focused on ABS-CBN, alleging that his cousins have been running it into the ground.
The Securities and Exchange Commission has now been forced to step in after Piki filed a complaint with the corporate regulator on May 6 against ABS-CBN, The Big Dipper Digital Content & Design Inc., chairman Martin Lopez, president Carlo Katigbak and treasurer and group chief financial officer Ricardo Tan Jr.
Piki, a director of ABS-CBN, has made serious and bold allegations against his cousins, including financial mismanagement, the siphoning of corporate funds and deceptive accounting amid severe financial distress.
Here’s what his complaints contained:
“ABS-CBN had accumulated net losses amounting to approximately P45.5 billion between 2020 and 2025.”
“ABS-CBN has continuously paid exorbitant amounts to management and other corporate officers booked as ‘compensation packages’ or ‘advances’ amid billions in net losses.”
ABS-CBN allegedly employed “deceptive accounting maneuvers, such as recording unsubstantiated circuitous foreign currency revaluations and interest income recognition that created ‘phantom’ dividends, to mask ABS-CBN’s true financial deterioration and manufacture an illusion of solvency.”
His complaint estimated that the compensation and advances to officers, managers and other individuals would reach P10.6 billion, or 23.38 percent of the accumulated losses from 2020 to 2025.
Piki also said allowing the present management to maintain control over ABS-CBN poses an existential threat to the company.
The complaint thus seeks the appointment of a management committee “to prevent the continuing dissipation, wastage and destruction of the corporate assets of the corporation that would lead to the inevitable insolvency of the latter.”
ABS-CBN responds
In response, ABS-CBN said that the company’s board of directors and committees have consistently exercised proper oversight of executive compensation, capital expenditures and financial reporting in accordance with applicable laws as the SEC starts its probe on the complaint filed by Piki against its executives.
As I said, both sides are back at it, in a war that is even uglier than before.
Unleashing their own attacks, the Lopez majority slammed Piki for agreeing to pay Prime Infrastructure P50 billion as a 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 Lopez majority said they found out about this “scandalous” premium only recently from board documents.
This is on top of what they dubbed as poison pills that would cost First Gen around P24 billion and put its sister companies in default if Piki is removed from his job.
Whew! As I said, the battle has turned uglier.
My takeaway is that even without this ongoing feud, ABS-CBN is in a precarious fiscal position. The company risks insolvency without drastic management changes – in addition to their ongoing strategies – or a new investor.
Piki’s complaint showed that the company has interest-bearing loans and borrowings amounting to P8.5 billion that are due and demandable this year.
Perhaps, this is also the reason why Gabby’s camp opted for peace.
They didn’t need the thorn on their side – Piki’s complaint against ABS-CBN, especially because they needed to focus on turning the media company around.
And they should.
Against that backdrop, I can’t help but think of scenarios.
What if, in the end, what Piki ultimately wants is to take over ABS-CBN, together with a white knight, and strengthen his grip on whatever is left of the family empire?
If this is the case, Gabby and his gang should bring in their own white knight before it’s too late.
But who could this be? There are many potential investors out there – Manuel V. Pangilinan, Converge’s Dennis Uy and Martin Romualdez are only some of the possible names.
The country’s richest man Enrique Razon has been the white knight of many troubled companies. Could he be the possible white knight for ABS-CBN, too?
The bigger question though, is who would be interested enough to jump into the fray involving the warring cousins?
That we’ll have to wait and see.
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