The Supreme Court (SC) decision affirming the Sandiganbayan antigraft court’s decision awarding to the government the 24-percent San Miguel Corp. (SMC) shares that were bought with coconut levy funds also required the government to use its share only for the benefit of the farmers and the coconut industry.
According to the January 24 high-court decision that was posted early this week on the Supreme Court website, the six Coconut Industry Investment Fund (CIIF) corporations, their 14 holding firms, and the 33.1 million shares in the SMC that they acquired were “declared owned by the government to be used only for the benefit of all coconut farmers and for the development of the coconut industry, and ordered reconveyed to the government.”
2 modifications
This was one of the two modifications made by the high court on the Sandiganbayan’s twin decisions in July 2003 and May 2004 that settled the ownership of the block of SMC shares registered under the CIIF and its holding companies and held in trust for coconut farmers.
The ruling answered questions by critics, including Senator Joker Arroyo, on whether the shares would go to the government or the farmers.
The high court modified the Sandiganbayan ruling declaring as unconstitutional Presidential Decree No. 755 issued by the dictator Ferdinand Marcos that authorized the Philippine Coconut Authority to use funds collected from the coconut levy to buy a bank “for the benefit of the coconut farmers.”
This bank was the First United Bank, later renamed United Coconut Planters Bank (UCPB), whose president and chief executive officer was businessman Eduardo Cojuangco Jr., appointed by Marcos as administrator of the coco levy funds that were collected from the country’s coconut farmers as a tax between 1973 and 1982.
Only the portion of the decree that authorized the Philippine Coconut Authority “to distribute, for free, the shares of stock of the bank it acquired to the coconut farmers under such rules and regulations it may promulgate” was nullified by the high court for being unconstitutional.
Ruling on 3 cases
The decision, however, resolved only three cases involving the coco levy funds that had been consolidated.
The high court ruled that the fourth case that had been joined to the three for the past few years—which involved questions relating to Cojuangco’s ownership of the UCPB shares that he allegedly received as option shares—would be resolved separately.
The government claimed that the UCPB, using the coco levy funds, bought the CIIF companies, which, in turn bought 47 percent of SMC.
The 24-percent block of shares was part of the 47 percent block of SMC shares sequestered by the Presidential Commission on Good Government on suspicion that these were acquired illegally by Marcos and his associates using the coco levy funds.
The government claimed that Cojuangco, as administrator of the coco levy, acquired the CIIF companies and the UCPB using the coco levy funds.