Mill dragged in Luisita land reform row

THE CENTRAL DE AZUCARERA DE TARLAC sugar mill at Hacienda Luisita in Tarlac City. EV ESPIRITU/INQUIRER NORTHERN LUZON

CITY OF SAN FERNANDO—Who owns the Central Azucarera de Tarlac (CAT)?

The sugar mill sits on 50 hectares inside Hacienda Luisita, a sugar plantation owned by the family of President Aquino for 53 years until November 2011 when the Supreme Court favored the government’s decision to distribute 4,925 hectares to 6,296 farm workers.

The question on CAT ownership cropped up as the lawyer of farm workers proposed to claim the mill as payment for the P1.33-billion shares of farm workers from the proceeds of the 582 ha sold by Hacienda Luisita Inc. (HLI).

The Cojuangco family-owned Tarlac Development Corp. (TDC), as landowner, and the farm workers formed HLI in 1989 to implement the Comprehensive Agrarian Reform Program (CARP) in the form of shares of stock instead of land distribution. They split the ownership of HLI at 67 percent for TDC and 33 percent for the workers.

The P1.33 billion came from the sale of 500 ha converted for industrial and commercial uses, and 80.51 ha sold for the Subic-Clark-Tarlac Expressway (SCTEx).

Jobert Pahilga, lawyer for the Alyansa ng mga Manggagawang Bukid sa Asyenda Luisita (Ambala), said that when the stock distribution option (SDO) was implemented in 1989, “CAT was among the assets of HLI included on the determination of sharing.”

Ambala had asked the Supreme Court to lift the temporary restraining order it granted to HLI against land distribution.

Pahilga invoked the trust fund doctrine of the corporation law, saying “all HLI’s asset held in trust for the creditors, including Ambala, must get their just share and in this case, Ambala, must be paid P1.33 billion share.”

“If in any case HLI cannot pay the said amount, its assets, including the sugar mill, will be subject for takeover by the farm worker-beneficiaries,” he said.

Antonio Ligon, HLI lawyer, said CAT is owned by the Cojuangcos but it is a separate and distinct entity from HLI.

“There is no basis whatsoever on the allegation that the assets of CAT belong to HLI. CAT has never been an asset of HLI and vice versa,” Ligon told the Inquirer by e-mail.

CAT, he said, runs the mill independently of HLI, which deals with sugarcane farming.

“No document, whether [Social Security System] or financial statements, even in the [Securities and Exchange Commission], will show that HLI is a stockholder of CAT and vice versa,” Ligon said.

He said the CAT mill was not included as an HLI asset in determining the sharing between HLI and farm workers.

“That is why the [Department of Agrarian Reform] has never considered CAT and its mill into the HLI picture,” Ligon said.

“So where does the trust fund doctrine apply here in the case of the CAT mill?” he said.

Asked about Pahilga’s information that HLI owns the mill, Agrarian Reform Secretary Virgilio de los Reyes said: “I do not know this for a fact.”

“This is the first point of inquiry that we need to find out. This is precisely the function of the audit ordered by the Supreme Court—to determine the operations of HLI and the use of the funds obtained from the sale [of the lands],” De los Reyes told the Inquirer by telephone.

He said Pahilga is part of the audit process.

Still, he said, he asked a team in the DAR to verify the ownership of CAT.

“Let me reiterate that the DAR will follow the Supreme Court order to the letter. I am not an envoy of anyone and I will follow what the law mandates me to do. The DAR has been very transparent in all its actions and we will continue to do so,” he said.

Ligon said all loans are properly reflected in HLI’s audited financial statements, none of which will be pass on to the farm workers.

The preliminary master list consisted of 5,365 farm workers while the provisional list has 1,221 names. Their inclusion or exclusion from the lists can be done this month, De los Reyes said.

In his visit to Nueva Ecija on Friday, De los Reyes said President Aquino’s directive was to hasten the distribution of all lands covered by land reform.

“Since the start, the President’s order was to hasten the distribution of land under CARP, not just Luisita but all lands under agrarian reform coverage,” he said.

He also assailed reports that the DAR is manipulating the list of beneficiaries.

“We have released the initial list. That is why I called it an initial list. Many groups are mad and claim that we’re manipulating the list. If we are manipulating it, then why am I releasing the list before we finalize it?” he asked.

De los Reyes said they were hoping that the land distribution would be finished by April or May next year.  With a report from Armand Galang, Inquirer Central Luzon