Coconut farmers present new demands in SMC shares dispute

The submission of a compromise agreement on the disputed stake in food and beverage giant San Miguel Corp. (SMC) to the Office of the Solicitor General (OSG) was stalled anew.

Finance Secretary Jose T. Pardo said the government is still trying to get the various coconut farmers organizations to conform to EO 313 which paves the way for the creation of a trust fund for coconut farmers.

"There are big bumps that need to be hurdled, especially after the farmers have come up with a new set of demands not previously discussed," Pardo said. He did not elaborate.

Various coconut farmers groups are opposing EO 313 signed last year by President Estrada because it failed to address several concerns of farmers.

They said EO 313 favors Estrada crony, SMC chairman Eduardo Cojuangco. Several provisions clearly provide elbow room for Cojuangco and his group to wrest control of the disputed stake since for one, it does not provide for a quit-claim clause which the farmers‘ groups sought.

The quit-claim clause would mean Cojuangco’s group could no longer claim anymore stake in SMC after the courts decide on the ownership issue pending before the Sandiganbayan.

The farmers‘ group said EO 313 failed to state the Commission on Audit as resident auditor of the trust fund, thus, making it possible for a private auditor to solely handle the fund’s books. This is clearly disadvantageous to the farmer-beneficiaries, the opposing groups said.

Pending the resolution of the ownership issue, Pardo said the DOF will still proceed with the negotiations for an underwriter for the selling of its 27 percent stake in SMC.

Last week, investment banks ING Barings, Lehman Brothers, Credit Suisse First Boston, JP Morgan and Goldman Sachs presented their proposals on the disposal of government’s shares in SMC.

Cojuangco originally took control of SMC in the 1970s when he allegedly bought shares in the company using money collected from a coconut levy imposed on coconut farmers and which was administered by the Coconut Industry Investment Fund.

Cojuangco’s 47 percent stake was sequestered by the Aquino administration but 20 percent was given back when the Estrada administration took over. Talks are rife the Cojuangco group will vie for government’s stake.