GSIS president sees no ouster of Lopez group
By Norman Bordadora, Christine Avendaño
Philippine Daily Inquirer
First Posted 02:03:00 05/26/2008
Filed Under: Electricity Production & Distribution
MANILA, Philippines—Winston Garcia, president and general manager of the Government Service Insurance System (GSIS), Sunday expressed pessimism there would be a management change in Manila Electric Co. during Meralco’s stockholders’ meeting on Tuesday.
Garcia, who has led an orchestrated government assault on the Lopez-controlled Meralco, said he had received information on the planned use of illegal proxies by the Lopezes to remain at the helm—a charge vehemently denied by Meralco.
“Their activity doesn’t make me very optimistic,” Garcia said in a telephone interview. “I’m afraid that they are going to do all the dirty tricks to subvert the true will of the stockholders.”
“That’s why I’m appealing to them. If they have nothing to hide, they should allow TV coverage of the proceedings,” he said. The Lopezes have rejected this proposal.
Garcia said he had information that the Lopez group had hired 80 lawyers to look after its interests on Tuesday. He also said that Meralco employees had been given the day off “so they can pack the gallery.”
Struggle continues
“We will still continue with our struggle. We believe strong public opinion will right the wrong,” Garcia said.
He indicated that the GSIS and other government financial institutions in Meralco would continue the fight in the courts if needed. If dirty tricks materialize, Garcia said members of the Lopez group would go to jail, including Meralco chair Manuel Lopez.
Meralco executives have said that if Garcia has evidence he should go to court instead of talking to the press.
The GSIS used to own only 9 percent of Meralco stocks. In March, it bought massively into Meralco. Garcia said on Thursday during a visit to the Inquirer that GSIS had amassed 25 percent of Meralco stocks and, along with the 11 percent share of other government financial institutions, had a total of 36 percent, enough to unseat the Lopezes.
Garcia first sat in on the Meralco board meeting in April and immediately began banging the table in an attempt to get a look at its transactions, alleged “sweetheart deals” with sister companies and “abusive practices” that had led to the highest electricity rates in Asia next to Japan.
Lack of transparency
Garcia said a lack of transparency had allowed Meralco to charge its customers excessively and added that rates could go down for 60 percent of the nation’s power users if a new and efficient management team took over the electricity distributor.
He also planned to break up the Meralco franchise to encourage competition among power retailers and thus lower rates.
Allies of President Gloria Macapagal-Arroyo in the Senate and the House of Representatives took the cue from Garcia’s high-profile media campaign, threatening to revoke the Meralco franchise.
Meralco executives say Meralco is one of the highly regulated utilities and that all its transactions are aboveboard and authorized by law. They say that the high rates are a result of the value-added tax (VAT) and royalties on natural gas used by Lopez-owned independent power producers.
Attempt to silence ABS-CBN
Administration critics say that government moves against Meralco are part of an attempt to silence the Lopez-controlled radio-TV network ABS-CBN Broadcasting Corp. for its tough stand on corruption allegations against Ms Arroyo. They say the moves against the utility distributor were reminiscent of what happened to the Lopez business interests at the outset of the Ferdinand Marcos dictatorship.
On Sunday, however, Executive Secretary Eduardo Ermita repeated that Malacañang was taking a hands-off policy in the Garcia-Meralco confrontation.
Ermita said the President had not given Garcia instructions for Tuesday’s Meralco stockholders meeting. He said the Palace was confident that Garcia would “make proper representation of the interest of GSIS members and the interest of the public itself.”
Real issue is power cost
Camarines Sur Rep. Luis Villafuerte, one of Ms Arroyo’s top allies in Congress, said in a statement Sunday that the “real issue” was the escalating power costs.
“In the past weeks, we have all been bombarded by expensive full page ads and multimedia campaigns by various sectors involved in the electricity industry,” Villafuerte said.
“We should not allow ourselves to be distracted from the real issues and solutions.”
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