11 June 1998: Businessman Eduardo Cojuangco, Jr. and his 43 sequestered firms have reportedly asked the Supreme Court to uphold their right to vote their shares in food and beverage giant San Miguel C…
11 June 1998: Businessman Eduardo Cojuangco, Jr. and his 43 sequestered firms have reportedly asked the Supreme Court to uphold their right to vote their shares in food and beverage giant San Miguel Corp. (SMC). In a 36-page comment, the businessman asked the High Court to affirm a Sandiganbayan ruling that allowed him and his companies to vote their stocks during SMC“s stockholders meeting on 21 April. Recent reports say that he sought the dismissal of a government plea seeking the reversal of the antigraft court“s 20 April decision. The Sandiganbayan last month allowed Mr. Cojuangco and the sequestered firms to vote the disputed stocks and elect their representatives to the SMC board. The court issued the ruling in the absence of proof that the equity stands to be dissipated in case the registered owners are allowed to vote them. Mr. Cojuangco and his firms own some 452 million shares or 20% of SMC“s total outstanding capital, enough to vote three representatives to the firm“s 15-man board. The shares were reportedly frozen by the Presidential Commission on Good Government (PCGG) in 1986, shortly after a popular uprising toppled the regime of the late President Ferdinand Marcos. Mr. Cojuangco and his firms were allegedly used by the late President and his family in amassing ill-gotten wealth. The PCGG had been voting the disputed stocks at every SMC annual stockholders meeting since 1986. Represented by former Solicitor General Estelito Mendoza, Mr. Cojuangco told the Tribunal that the assets do not stand to be wasted in case his firms are allowed to vote them. He cited a Supreme Court ruling which supposedly allows registered owners of sequestered shares to vote these unless the stocks stand to be diluted. The businessman also noted that the only exception is when the PCGG has taken over a business belonging to the government or whose capitalization comes from public funds but which has landed in private hands. “The PCGG cannot exercise the right to vote, except for demonstrably weighty and defensible grounds, and always in the context of the stated purposes of sequestration and provisional takeover, which is to prevent the dispersion of the corporate assets,” he said. He added that in the absence of sufficient evidence that the assets are ill-gotten and that these stand to be lost, the right to vote the shares remains with the registered shareholders. Mr. Cojuangco further noted that the PCGG failed to prove before the Sandiganbayan that the stocks would be wasted in case he and his firms were allowed to vote them. “Thus, notwithstanding several opportunities granted to it by the Sandiganbayan to present evidence … the PCGG failed to do so. It can therefore be concluded that no such evidence exists,” he pointed out. “Undeniably, therefore, the right to vote pertaining to their sequestered shares in SMC has always belonged to and remain with herein private respondents,” he added. Mr. Cojuangco also said the PCGG petition has become moot since they had voted the shares and elected their representatives to the board last 21 April. He also sought the dismissal of the PCGG appeal on technical grounds, specifically for its alleged violation of Court rules. He said the PCGG plea was not accompanied by a certified copy of the Sandiganbayan ruling it was seeking to overturn, in violation of Court Circular No. 1-88 which requires a petitioner to attach duplicate copies of a challenged order. “Only a faxed copy, and not a duplicate original nor a certified true copy, of the (Sandiganbayan) resolution was attached to the petition. The petition should therefore be dismissed outright,” he argued. The PCGG has been voting the stocks since 1986 except in 1991 when the High Court authorized registered holders of the frozen shares to vote them. In 1992, both Mr. Cojuangco and the PCGG were barred from exercising their voting rights based on a temporary restraining order issued by the High Tribunal on 20 April 1992. The PCGG was again allowed to vote the stocks beginning 1993, after the High Court barred Mr. Cojuangco and his firms from voting the disputed shares, The Cojuangco block of shares is separate from one that was supposedly acquired by coconut farmers through the then Cojuangco-controlled United Coconut Planters Bank. This particular block was supposedly funded with proceeds of the levy on coconut products that the farmers paid, but which was voted by Mr. Cojuangco and his representatives.