Sandiganbayan rejects firms’ plea on coco levy

/ 07:21 AM December 10, 2018

The Sandiganbayan has denied for lack of merit the appeals of several corporations against the enforcement of the Supreme Court’s 2012 ruling that P83 billion in coconut levy assets belonged to the government for the benefit of coconut farmers.

In a six-page resolution dated Dec. 3, the court’s Second Division sustained its Aug. 7 resolution for the issuance of a writ of partial execution.


This will implement its May 7, 2004, partial summary judgment upheld by the Supreme Court on Jan. 24, 2012.

Ordered transferred to the government were six companies known as CIIF Oil Mills Group (CIIF-OMG) and its 14 holding companies, and the holding companies’ 753.85 million shares worth P71.04 billion in San Miguel Corp. (SMC).


Corporate losses

In their respective appeals, United Coconut Planters Bank (UCPB) and United Coconut Planters Life Assurance Corp. (Cocolife) argued that their investments in the CIIF-OMG would be affected by the turnover of the oil mills to the government.

CIIF-OMG and the holding companies said it would be “illegal and grossly inequitable” to turn over their SMC shares—their sole asset and means of settling debts.

Cocolife and the oil mills also raised the fear of having to be closed down and liquidated.

The Sandiganbayan dismissed the arguments as rehashed, saying it had “already been judiciously passed upon and properly considered” before.

The Supreme Court declared that even UCPB loans used by CIIF-OMG holding companies to acquire the SMC shares were “public in character” because the bank was ruled 72.2 percent government-owned.

Compromise nixed


The Sandiganbayan denied Cocolife’s September plea to suspend the proceedings and give it a chance to negotiate a compromise with the government.

Cocolife argued that a settlement would help avoid the “complexities of litigation” and lead to the “swift execution” of the judgment.

But the court saw no legal basis for the plea, “especially since the party it aims to allegedly negotiate with is seeking the immediate execution” of the ruling.

The Supreme Court decision became final and executory on Dec. 10, 2014. But on June 30, 2015, it issued a temporary restraining order (TRO) on then President Benigno Aquino III’s Executive Order No. 180 that governed the reconveyance and use of CIIF assets.

This meant that the government could seek the transfer of CIIF assets only after the Supreme Court lifted the TRO in an Aug. 8, 2017, decision that nullified parts of Aquino’s order but sustained the provisions on the assets transfer to the government.

No more hearings

The Sandiganbayan’s Dec. 29, 2017, resolution granting the request of UCPB and Cocolife for more hearings to assess the effect on their investments threatened to delay the turnover—but this was reversed in the Aug. 7 resolution.

The CIIF was the surplus of the taxes imposed by then dictator Ferdinand Marcos on coconut farmers.

Instead of being used to improve the plight of the poverty-stricken farmers, Marcos cronies were accused of plotting to use the funds to set up various corporations, including UCPB.

Besides the corporations, the other defendants in Civil Case No. 0033-F include the late Marcos and his widow, Imelda, and businessman Eduardo “Danding” Cojuangco Jr.

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TAGS: coco levy, Sandiganbayan, Supreme Court
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