Palace: Lopez family could lose Meralco
By Michael Lim Ubac
Philippine Daily Inquirer
First Posted 04:23:00 05/07/2008
LEGAZPI CITY—Will she or will she not?
Is President Gloria Macapagal-Arroyo all-out to get Meralco from the Lopezes?
Malacañang Tuesday admitted that the Lopez family could lose control of Manila Electric Co. (Meralco) in a boardroom battle, but said this should not be interpreted as a government takeover of the power distributor.
Sergio Apostol, President Macapagal-Arroyo’s chief legal counsel, said by phone that the Arroyo administration had no plans to wrest control of Meralco from the Lopezes.
“The GSIS (Government Service Insurance System) is only interested in the shady transactions and finances of Meralco. It has no interest in a leadership battle. I think there is no sense of talking this way because a corporation is controlled by majority stockholders,” Apostol said.
But when asked if a takeover of the utility firm was possible, Apostol said: “We will leave it to the GSIS because the policy of the government is privatization.”
Apostol admitted that another group of stockholders could take control of Meralco, saying this was done after President Ferdinand Marcos declared martial law in 1972 and took over the power firm. “Meralco can be run by other people,” he said.
Dummy stockholders
Apostol said wresting control of Meralco would not be an easy battle for GSIS Chair Winston Garcia.
“I believe Meralco has dummy stockholders. Garcia should watch out for that,” Apostol said, pointing out that Meralco management is “profit-oriented, not public service-oriented because it’s a business entity.”
He said the Arroyo administration’s “priority concerns” were to change the attitude of Meralco, then to “reduce power rates by returning back to the Filipinos whatever they had overcharged in the past.”
Apostol supported Garcia’s demand for full transparency in Meralco.
“The intention of Winston in demanding that Meralco open its book of accounts is correct and that speaks of transparency. That’s legal under corporate law. If Meralco refuses, Winston should file a complaint before the Securities and Exchange Commission ... to demand Meralco to open (its) books of account. Otherwise, they (Lopezes) can be sanctioned if they refuse,” he said.
Garcia can also go to court to seek the issuance of a mandamus to compel Meralco to open its books, said Apostol.
Caution must prevail
“If Garcia finds enough evidence against erring management officials from Meralco, he could go to court and file cases against personalities. But it should be done with caution. Caution must prevail over emotions, but yes the government should file cases.”
He cited the Supreme Court landmark ruling in 2003 that ordered Meralco to reimburse a total of P30 billion to customers it overcharged from 1994 to 2002.
Garcia said he was “surprised” that “no heads have rolled” in the debacle which he blamed entirely on the Lopezes.
Global review
Albay Gov. Joey S. Salceda, who has the President’s ear on economic matters, told reporters here that Ms Arroyo was not after “Meralco, not after the Lopezes, but after lower IPP (independent power producer) rates.”
“A takeover of Meralco is not in the national interest. Government has no business choosing winners or losers. Even if it were so, we are better off doing other things and there are far better options to lower electric costs,” Salceda said.
Salceda talked to reporters after attending a meeting presided over by Ms Arroyo of the “localized development team” composed of Bicol’s six governors, four Catholic bishops, police directors and other local officials.
“Are we at war?” Salceda asked, pointing out that singling out a business entity “has a chilling impact on all the rest.” He said this would be “bad for business, the economy and the poor.”
Salceda instead suggested a “global review” for the second time of the contracts entered into with IPPs by the Ramos administration.
“A second review is a strategic imperative since we gained little from the first. Energy prices pose larger risks to welfare than rice,” he said.
Pangilinan urges caution
Sen. Francis Pangilinan urged caution in going after Meralco, citing the record of National Power Corp. (Napocor).
“The haste by which government is acting to try and make this happen is a serious cause for concern because if we are to go by the track record of government in running a power company, all it has to show for it is the huge indebtedness and mismanagement of Napocor. We don’t ever take that route again,” Pangilinan said.
Rep. Teofisto Guingona III of Bukidnon also cited the government’s poor record in managing companies.
“The government has taken over many companies—Philippine National Bank, Philippine Airlines. The takeovers were all a failure,” he said. “I don’t think government should be running a business.”
Ms Arroyo’s son, Pampanga Rep. Juan Miguel Arroyo, said: “Whoever manages Meralco as long as it brings down the price of electricity (and) they are friendlier to the consumers is OK with me.” Arroyo is chair of the House committee on energy.
Nothing against ABS-CBN
Asked whether Ms Arroyo had an ax to grind against the Lopez family, which owns giant radio-TV network ABS-CBN Broadcasting Corp., Apostol said:
“That’s not true. The government is doing this for the people. In fact, the noninterference of the government in ABS-CBN—(which) continues its media attacks against her—is a good sign of democracy. If she is retaliating, she could use her government to directly hit at ABS-CBN, not Meralco. But Malacañang is not doing it.” With reports from Gil C. Cabacungan Jr., TJ Burgonio and Norman Bordadora
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