Lawmakers warns vs probe on San Miguel over investments

MANILA, Philippines - A senior House member warned lawmakers yesterday against conducting any investigation on food and beverage giant San Miguel Corp. (SMC) about its planned investments that may affect the 27-percent stake of coconut farmers in the food and beverage giant.

Negros Occidental Rep. Alfredo Marañon III said news reports urging the Presidential Commission on Good Government to check the blue chip firm’s investments in the Lopez-controlled Manila Electric Co. and oil refiner Petron Corp. may send the wrong message.

“Personally, I think everyone should welcome SMC’s entry into these companies, shareholders in particular. SMC’s entry into power and oil distribution, telecoms, banking, among others, will only serve to enhance the value of their shares,” he said.

“After all, it is investing in major Philippine corporations - Meralco and Petron – and going into industries that has very high-yields and growth potential,” the vice chairman of the House committee on agriculture said.

According to him, “Filipinos have long been looking for salvation from high gas and electricity prices.” “If anyone can do it, it’s probably SMC because it is a solid, able, and capable company with a proven track record not only in the Philippines but all over Asia.”

A probe may send the wrong signals to the business industry, especially because SMC – one of the biggest companies in the country – had bared plans to lower gas and electricity prices through its stakes in Meralco and Petron.

Aside from this, Maranon also described the timing of the inquiry as “strange” because it was scheduled even as Congress is on recess.

“I find the timing and the manner by which this inquiry was scheduled, highly irregular. Congress is in recess. It seems there is a concerted effort to push this anti-San Miguel agenda. What we want to avoid is having Congress used for forum shopping,” he said.

Since 2006, SMC posted a consolidated net income of P20.9 billion for the first nine months of 2008, nearly 200 percent higher than the same period in 2007.

Later, it announced diversification plans to enter these high-growth industries in a bid to increase shareholder value and boost its long-term viability.

Maranon added that it appears San Miguel’s entry “has really shaken things up.” In the end, he said, “it’s us, the consumers, who will benefit from all of this. This should be a welcome development for all Filipinos.”

“There are more pressing issues in government that we should be tackling. We should not use Congress for business politicking and instead concentrate on working on policies that will uplift the lives of our countrymen,” he added.

However, Anakpawis Rep. Rafael Mariano, who represents the farmers, feared the diversification of investment efforts may lead to the “dissipation” of the multi-billion coco levy fund shares of the farmers in the food and beverage conglomerate.

“SMC’s current moves to diversify its investments in the energy sector is no less than a sinister plot to dissipate small coconut farmers’ funds and other assets acquired through the coco levy trapped in Danding’s hands for almost four decades now,” he said.

Mariano also backed Quezon Reps. Lorenzo Tañada and Prospero Alcala’s call on the PCGG to immediately inquire if the 27 percent coconut levy fund shares in SMC were used in its current investments.

Mariano is the author of House Bill 5011 or the proposed “Act Creating the Coconut Industry Development Council for the Administration and Management of the Coconut Levy Funds.”