Reopen coconut levy case, Sereno urged

Chief Justice Maria Lourdes Sereno. INQUIRER FILE PHOTO

Coconut farmers are challenging newly appointed Chief Justice Maria Lourdes Sereno to put her money where her mouth is for the sake of a quarter of the Philippine population mired in poverty.

Sereno issued a dissenting opinion in the Supreme Court ruling in April 2011 giving businessman Eduardo “Danding” Cojuangco a 20-percent block of the shares of stock of San Miguel Corp. (SMC) that had been sequestered for allegedly being part of the ill-gotten wealth of the late dictator Ferdinand Marcos.

“When the time comes that the legal impediment presented before the court today is lifted (perhaps through newly discovered evidence or another justifiable reason), the opportunity to revisit the ruling of this court may present itself, and Philippine history may have a chance to be redeemed in part,” wrote Sereno, who was an associate justice then.

A loose coalition of about a dozen militant farmers’ groups believes that that time has come, with the appointment by President Aquino of the 52-year-old Sereno on Friday to replace the much-reviled Renato Corona, to pursue reforms in the judiciary.

The coalition plans to file on Wednesday a motion for the reopening of the case against Cojuangco, Aquino’s uncle, banking on Sereno’s promise that she will pursue good governance exemplified by the late Interior Secretary Jesse Robredo.

Soc Banzuela, national coordinator of the farmers’ group Pakisama, expressed hopes that with Sereno’s appointment, justice would be served, stressing that the 3.5 million coconut farmers and their families constitute the nation’s “poorest of the poor.”

“We are prepared to meet the challenges that Chief Justice Sereno noted, and when we do, we will hold her to her word. Let this be the first test of her independence—to undo the wrong that the court itself had occasioned and countenanced,” Banzuela said.

Marco Sardillo III, a volunteer lawyer for the coalition, believes all is not lost although the Corona court threw out three motions for reconsideration and made an “entry of judgment” in April, making its decision final and executory.

“That judgment favoring Cojuangco offends the constitutional requirement that decisions must state the law on which they are based and because it denies the republic and the country’s coconut farmers due process, it is void,” Sardillo said in an interview on Sunday. “As such, it will never become final and neither can it be a source of rights.”

Cojuangco’s block of SMC shares was part of the 51-percent chunk of the shares in one of the country’s largest conglomerates acquired while the businessman was head of state-owned United Coconut Planters Bank (UCPB) in 1983. Originally worth P2 billion, the value of the shares has ballooned to around P200 billion.

Joke of the century

The deal was arranged by Cojuangco’s top-notch lawyers in Accra, some of whom would later be elected senators. Activists have described the coco levy as nothing more than a “racket” and the biggest “scam” ever to be foisted on the nation.

In its ruling last year, the Supreme Court said that the

20-percent block—494.8 million common shares valued at P58 billion at P117.40 apiece—belonged to Cojuangco. The high tribunal dismissed claims that he used money deposited in UCPB to purchase the block in violation of his fiduciary trust and shrugged off charges he was part of the Marcos gang that ripped off the country.

A dissenting justice called the ruling the “joke of the century.”

In January, the high court declared that another 24-percent block of SMC shares belonged to the government to be used only for the benefit of all coconut farmers and for the development of the coconut industry.

The Philippine Coconut Producers Federation, or Cocofed, has appealed the ruling on this block acquired in a complex scheme involving 14 holding companies. Cocofed is claiming the shares on behalf of 1 million unnamed farmers.

The 24-percent block consists of more than 700 million shares. Originally representing 27 percent of SMC stock, the block was whittled down by SMC’s expansion with the entry of the Japanese brewer Kirin.

This block was converted from common to preferred shares at P75 apiece in a deal approved by the Supreme Court in 2009 at a great loss to the farmers.

At some point, SMC shares fetched as high as P180 apiece. Dividends accruing to this block had yielded P8.8 billion as of last January.

Another 4-percent of SMC stock belonged to former SMC boss Andres Soriano—127.8 million common shares worth P15 billion at P117.40 apiece. This block has been converted into treasury warrants. The court has directed SMC to release the fund to the government.

Ruling inconclusive

In calling for a review, former Quezon Representative Oscar Santos noted that the vote in the court’s ruling in favor of Cojuangco was 7-4-4 and was “inconclusive.”

“The Supreme Court failed to consider in its ruling the ‘social context’ involved. A big number of our people, especially the farmers, suffer from worsening poverty,” Santos said. “Justice involves the weighing of public needs as against private desires.”

“Measures should now be pursued to meaningfully uplift the lives of a big number of our people,” he added.

“The need to lessen their poverty situation has become urgent. This is a unique case. One of a kind. Sui generis. Time is of the essence,” said Santos, 82, who has been at the forefront of the farmers’s crusade to recover the levy funds.

Sardillo, the pro-bono lawyer, said the farmers would urge the Sereno court to grant them another chance to be heard.

He noted that in its resolutions dismissing the farmers’ second and third motions for reconsideration on the January 2011 ruling the tribunal “expunged the pleadings putting forward proofs,” such as Marcos diaries, as evidence of Cojuangco’s close association with the late dictator.

“We pray that the court will find as substantial justification the fact that that decision offends the constitutional prescription requiring decisions to state the law and facts on which they are based. When seven members of the court concurred in the decision denying the existence of the definition of ill-gotten wealth, and proceeded upon the definition that it made up, it effectively promulgated a decision that did not state the pertinent law,” Sardillo said.

He said that in its ruling on the 24-percent block of SMC shares, the court upheld the definition by the Presidential Commission on Good Government of ill-gotten wealth, adopted in the 2005 case of Republic vs Estate of Hans Menzi, where Cojuangco was one of the respondents.

“The unanimous January 2012 decision in favor of the coconut farmers—setting the real and legal definition of ill-gotten wealth and recognizing the true nature of United Coconut Planters Bank, that is, as a public corporation—effectively overturns that April 2011 decision, a legal fact constitutive of supervening circumstances that would make the execution of that apparently final decision unjust and inequitable, placing this situation well within one of the recognized exceptions to the immutability doctrine,” Sardillo said.

Originally posted: 8:18 pm | Sunday, August 26th, 2012