The Supreme Court on Tuesday affirmed a 2004 ruling of the Sandiganbayan antigraft court that awarded a 24-percent block of shares in San Miguel Corp. registered in the name of the Coconut Industry Investment Fund (CIIF) and its holding companies, to the government, which holds it in trust for the country’s coconut farmers.
The public information office of the Supreme Court has yet to release a hard copy of the decision, penned by Justice Presbitero Velasco Jr., as of press time.
However, reliable sources in the high tribunal said the voting went 11 to nil, with Justices Antonio Carpio, Teresita Leonardo de Castro and Diosdado Peralta inhibiting and Justice Arturo Brion on official leave.
Carpio was one of the petitioners in the case to declare the coconut levy funds as public funds. De Castro and Peralta were members of the Sandiganbayan division that decided the case.
Sequestered
This 24 percent block of San Miguel shares was part of the 47 percent block of shares that the Presidential Commission on Good Government (PCGG) had sequestered in 1986 on suspicion that they were acquired illegally by Ferdinand Marcos’ dummies using coco levy funds.
Tuesday’s high court ruling affirmed the May 2004 Sandiganbayan ruling awarding 27 percent of the 47 percent block of SMC shares to the government. (The 27 percent government stake was reduced to about 24 percent after it was diluted with the investment of Japanese brewer Kirin in SMC.)
In a decision last April, the Supreme Court declared as final its decision declaring the remaining 20 percent of the 47 percent sequestered SMC shares claimed by businessman Eduardo Cojuangco as having been legally acquired, contrary to the government’s claim that they were ill-gotten as they had been bought with the coco levy funds.
The coco levy funds are monies collected from the coco levy, a forced tax that the dictator Marcos imposed on the country’s coconut farmers from 1973 to the early 1980s. Marcos had appointed his crony, Cojuangco, as the administrator of the levy funds. The government claimed that this gave Cojuangco and his associates the means to buy coconut trading firms, oil mills, buy a bank, the United Coconut Planters Bank (UCPB), and shares of stock in SMC.
These acquired assets were placed in the name of the Coconut Industry Investment Fund (CIIF), a holding company owned by six oil mills and controlled by Cojuangco. The assets were held by the UCPB, the CIIF administrator which was under the control of Cojuangco.
In 2001, the Supreme Court declared the coco levy funds as “prima facie” public funds, but left it to the Sandiganbayan to determine the owner of the assets acquired with the funds.
The 24 percent block of SMC shares, or more than 753 million shares, valued at between P50 to P100 billion, were earlier ordered converted from common shares into preferred shares in a Supreme Court ruling on Sept. 17, 2009.
The high court noted that the PCGG—the agency tasked with recovering the ill-gotten wealth of the dictator Ferdinand Marcos and his family and associates—had been holding on to the sequestered shares for more than 20 years. It said it was time the PCGG relinquished its role in SMC in light of the claim that the sequestration of the CIIF shares had “frightened away investors and stunted the growth of the company.”
During the term of former President and now detained Pampanga Representative Gloria Macapagal-Arroyo, the government sought the high court’s permission to allow the government to immediately sell its 24 percent stake in SMC to prevent further losses brought about by the continued depreciation in the stock market value of the shares.
Top Frontier Investment Holdings offered to buy the sequestered SMC shares for P56.6 billion but withdrew its offer.
To identify beneficiaries, President Benigno Aquino III earlier ordered the creation of a coco levy task force tasked to come up with proposals on how to deal with the coco levy issues.
The task force has been tasked to propose a system that will accurately identify beneficiaries of the coco levy funds and come up with possible options on how to use the proceeds of the coconut farmers’ 24-percent share of the SMC.