Court junks Syjuco bid to restrain RFM

The Quezon City regional trial court has thrown out a petition by Iloilo Rep. Augusto Syjuco for a temporary restraining order (TRO) against RFM Corp. on the sale of its shares in Cosmos Bottling Corp. to food and beverage conglomerate San Miguel Corp.

In an order issued yesterday, acting judge Modesto Juanson of Branch 216 of the Quezon City RTC said that "after assessing both contentions, the court is inclined not to issue the TRO being sought. The supposedly irreparable injury plaintiffs (Syjuco) may suffer is not clearly defined and proven as yet. "

With the denial of Syjuco’s petition, there is no more legal impediment for RFM to proceed with the sale of its Cosmos shares to San Miguel Corp., ACCRA lawyer Francis Lim, who serves as RFM legal counsel for the case, said.

Early last month, RFM and SMC signed a memorandum of understanding wherein the latter, together with the Atlanta-based The Coca Cola Co., would acquire Cosmos for P15 billion subject to due diligence.

The MOU set Sept. 15 as the target date for the signing of the definitive agreement, but it had to be pushed back due to the court cases filed.

It is expected that with the due diligence drawing to a close, the MOU will be signed very soon.

Lim explained that RFM was never a party to any of the transactions with Syjuco’s softdrinks companies — Jaz Cola and RC Cola — five years ago. None of the agreements was ever signed by RFM or any of its representatives, he said.

Earlier, Syjuco had obtained a preliminary injunction from the court against the sale by Cosmos of those assets he had previously owned. But the RFM Group has maintained that the injunction does not stop the sale of RFM’s shares in Cosmos because RFM was not a party to the case. Syjucos’s lawyers then amended their complaint by including RFM.

Syjuco has asked the court to rescind a memorandum of agreement entered into in November 1996 and other subsequent contracts that provided for the sale of his companies’ beverage bottling operation and properties to a Cosmos subsidiary, Cosmos Visayas Bottlers Inc., for P1.168 billion.

Lim said the filing of an amended complaint by Syjuco is "an admission that the latter’s original application for preliminary injunction does not cover the sale of RFM‘s shares in Cosmos."

"The court order turning down the TRO against RFM basically confirms and strengthens our position that RFM is not included in the original complaint, and RFM can now proceed with the sale of its shares in Cosmos to SMC," Lim said.

For his part, RFM executive vice president Felicisimo Nacino said RFM and SMC have discussed beforehand the possible issuance of an injunction and have prepared several options to be able to go through with the deal without violating the said injunction.

"Remember that even if Mr. Syjuco eventually is in the main case, he has to return to Cosmos at least P1.2 billion paid to him by Cosmos. He can’t get back his assets if he can’t give back the money," Nacino said.

Meanwhile, Syjuco yesterday called for the resignation of Philippine Stock Exchange (PSE) chairman Felipe Yap whom he accused of having profited from what he described as an "anomalous and highly unusual" trading of Cosmos Bottling Corp., the softdrink subsidiary of the Concepcion-owned RFM Corp.

Syjuco said PSE data would show that F. Yap Securities, a brokerage firm owned by the Yap family, was among the heavy buyers of Cosmos shares on July 25, when the volume of its transactions jumped by almost 10,000 percent. The brokerage firm reportedly accounted for 16 percent, or P25.1 milion, of the total turnover for that day.

"We believe — and we ask — that Mr. Felipe Yap immediately resign as chairman of the PSE board of governors so that the PSE can launch a full investigation into this irregularity without influence from him," he said.