7 October 1998: Philippine“s San Miguel Corp. (SMC) chairman Eduardo Cojuangco, Jr. (aka “Danding” by locals) has reportedly asked the Supreme Court to keep the government from intervening in the aff…
7 October 1998: Philippine“s San Miguel Corp. (SMC) chairman Eduardo Cojuangco, Jr. (aka “Danding” by locals) has reportedly asked the Supreme Court to keep the government from intervening in the affairs of the beer and food conglomerate by removing its right to vote its shares in the firm. In a 21-page rejoinder, Mr. Cojuangco said the Presidential Commission on Good Government (PCGG) should be ordered to heed a 1991 ruling of the High Tribunal preventing the commission from performing “acts of strict ownership” of sequestered properties. “PCGG is a mere conservator. It may not vote the shares in a corporation and elect members of the board of directors,” said Mr. Cojuangco, quoting the court“s decision on the extent of the commission“s hold over companies of friends of former President Ferdinand Marcos. It was the first time Mr. Cojuangco, as SMC chairman and chief executive officer, unequivocally pleaded the Court to take away PCGG“s prerogative to perform direct administrative acts in the country“s largest food and beverage corporation. Ironically, four of the five PCGG nominees at the SMC board had voted last July for Mr. Cojuangco to assume the chairmanship. He replaced Andres Soriano III, who headed SMC for 12 years (see GlassOnline report of 6/8/98). In asking the Court to take away the government nominees“ right to vote in the 15-man board, Mr. Cojuangco insisted the PCGG may only take the reins of a sequestered corporation if its capitalization came from public funds. “The mere fact of sequestration does not automatically result in the exercise by the PCGG of the right to vote. Although both the act of sequestration and the exercise of the right to vote must be necessitated by a danger of dissipation of assets, these must be adjudged separately,” said Mr. Cojuangco. “The PCGG may only exercise if there is a danger of dissipation, concealment or destruction of the corporate assets, and the PCGG had admitted its inability to prove this,” he added. In 1994, Mr. Cojuangco and 43 of his firms questioned the qualification of seven PCGG nominees to the SMC board, contending that they did not own the required minimum 5,000 shares. The anti-graft court affirmed the election of the government nominees, prompting the SMC group to elevate the case to the High Tribunal. The PCGG was originally established in 1986 to seize assets said to have been illegally acquired by Mr. Marcos and his close associates. The commission was empowered to elect nominees into the corporations belonging to the associates of former president Marcos, to prevent any dissipation of the assets.