Eduardo “Danding” Cojuangco, current chairman of San Miguel Corp. INQUIRER FILE PHOTO
Coconut farmers can kiss goodbye their hopes of recovering nearly P60 billion worth of shares in San Miguel Corp. (SMC).
The Supreme Court slammed the door to any further judicial action concerning a 20-percent bloc of SMC shares when it issued an “entry of judgment” after declaring on April 12, 2011, that the contested portfolio belonged to Eduardo “Danding” Cojuangco, current chairman of the highly diversified conglomerate and uncle of President Benigno Aquino III.
A six-page entry of judgment notice dated March 16 on Cojuangco’s SMC shares was sent on Tuesday to the Presidential Commission on Good Government (PCGG), which sequestered the package after SMC stock certificates in blank were found in a Malacañang vault on the night the dictator Ferdinand Marcos was ousted during the 1986 People Power Revolution.
Final and executory
The document, signed by Deputy Clerk of Court Ma. Lourdes C. Perfecto, said that the high court’s decision had become “final and executory and is hereby recorded in the Book of Entries of Judgments.”
The action ends three decades of judicial battles over the SMC shares waged by the PCGG and representatives of farmers’ organizations in an effort to recover alleged ill-gotten wealth of Marcos and his cronies.
Lawyers acknowledged that the court’s move meant “everything is closed” to efforts to recover the controversial Cojuangco shares in SMC that farmers said were fruits of the tax on copra imposed for nine years during the Marcos regime and should be used for their benefit and not for private individuals.
Cojuangco, 76, acquired the SMC shares from the late Enrique Zobel in 1983. He was then president of state-owned United Coconut Planters Bank (UCPB), depositary of the levy funds.
The court’s move came amid calls by reformists in the coconut industry on Mr. Aquino to move decisively and use the sequestered assets acquired with the use of a coconut levy collected during the martial law years to ease the plight of a quarter of the country’s population regarded as the poorest of the poor.
Critics have described the levy as the biggest scam perpetrated to enrich a few individuals at the expense of the 3.5 million coconut farmers and their families.
‘Joke of the century’
The petitioners had averred that Cojuangco violated a fiduciary trust and dipped his fingers into the UPCB fund that was created principally to address the farmers’ perennial credit problems that have put them at the mercy of loan sharks and usurers, usually traders who have controlled the industry since the martial law years and kept them impoverished.
Cojuangco allegedly took out loans from UCPB and credit advances from the Coconut Industry Investment Fund (CIIF) Oil Mills Group to acquire the SMC shares.
The court, in a ruling described by a dissenting justice as “the joke of the century,” said that the SMC portfolio “is the exclusive property of Cojuangco.”
An official valuation placed Cojuangco’s 494,881,157 common shares in San Miguel in January at P58,099,047,832 based on a share price of P117.40 per share. The price of an SMC share had reached as high as P180 on the stock exchange.
In January, the Supreme Court ruled that another 24-percent block of SMC shares belonged to the government because it was bought with the levy fund and must now be utilized for the benefit of the farmers.
Faceless, nameless
This portfolio was designated the SMC-CIIF block because it was acquired under the CIIF in an elaborate scheme that included the formation of 14 holding companies arranged by Cojuangco’s Accra law office.
The Philippine Coconut Producers Federation Inc., or Cocofed, has filed a motion for reconsideration of this decision claiming the package supposedly for its 1 million members, that the court itself said were “nameless and faceless.”
The case is pending. Cocofed has been accused of misusing the fund, which became a wallet that financed profligate projects of the martial law regime.
This SMC-CIIF block comprised 753,848,312 shares. It was converted from common to preferred shares at the behest of the PCGG under the Arroyo administration in a deal approved by the Supreme Court in 2009 at P75 per share at a great loss to the farmers, considering the high price of the SMC stock on the exchange.
The official valuation of this package as of Jan. 20 was P56,538,623,400. SMC has the option to redeem the stocks this year.
Dividends alone on this SMC-CIIF bundle had reached P8.8 billion.
Multiagency task force
Fearing raids on the funds deposited in UCPB, lawmakers have filed bills creating a trust fund for farmers.
Malacañang also has created a multiagency task force to draw up a program to ameliorate the industry with the use of levy-related assets under sequestration.
Farmers groups have urged Mr. Aquino to issue an executive order to free up at least the P8.8 billion in dividends on the SMC-CIIF shares for urgent use in the industry that is reeling from dwindling harvests from aging trees, requiring massive replanting and the impact of climate change.
Motions for recon
Following the April 12, 2011, decision, the PCGG and former Senators Jovito Salonga and Wigberto Tañada filed separate motions for reconsideration, which were denied.
In August, PCGG filed an omnibus motion for leave of court to file a second motion for reconsideration, pointing out an erroneous premise in its original decision—the absence of a definition of ill-gotten wealth and the necessity of treating this issue as “sui generis,” or one of a kind.
Salonga and Tañada likewise filed a second motion for reconsideration.
The court “expunged,” or threw out the petitions.
Lawyers said that the court’s move was unfortunate, pointing out that the high tribunal’s internal rules allow a second motion for reconsideration “in the higher interest of justice” by the court en banc upon a vote of at least two-thirds of its members. They say that in a belated dissenting opinion, Justice Lourdes Sereno raised the possibility that compelling new evidence could prompt the court to revisit the decision.
3rd recon ignored
Salonga and Tañada filed a third motion for reconsideration last November that attached as proof of Cojuangco’s being a Marcos crony pages from the dictator’s diaries which clearly identified Cojuangco as “one of the congressmen close to [Marcos]” to debunk the high tribunal’s claim that the businessman was not a Marcos associate. This was likewise ignored.
Critics say that the coconut levy is the biggest social justice issue to confront the nation, affecting some 25 million Filipinos.