SC junks government bid to release P1.13-billion SMC dividends

MANILA, Philippines - The Supreme Court (SC) has junked a government bid to release cash dividends to a block of San Miguel Corp. (SMC) shares held by the Coconut Industry Investment Fund (CIIF) Oil Mills Group.

In a unanimous resolution released last Friday, the High Court denied the motion filed by the Office of the Solicitor General (OSG) to lift an earlier order restraining the transfer of P1.13 billion worth of SMC shares intended to fund various programs of the group for coconut farmers.

It also denied the OSG’s motion for the issuance of a status quo order which would allow the release of the funds pending the final determination of the ownership issue.

The SC junked the OSG argument that the use of funds should be allowed pending the final determination of the ownership issue, as this was the status quo prior to conversion.

The government pointed out that the proper utilization of the cash dividends to fund certain coconut farmer programs and projects would be assured because funding proposals would still have to pass scrutiny by the PCGG, being the sequestrator of the assets funded by the coco levy funds including the SMC shares.

The government’s petition noted that the SMC has been remitting the cash dividends on a quarterly basis to an escrow account that was opened with the United Coconut Planters Bank.

However, UCPB is not releasing any of the cash dividends to the CIIF Oil Mills Group, a group of companies also funded by the coco levy funds, unless authorized to do so by the PCGG.

The SC ruled that the arguments of OSG lack merit so it maintained the TRO it issued last Sept. 28 upon the petition of the Philippine Coconut Producers Federation (Cocofed), which is contesting the release of the SMC cash dividend funds to the CIIF OMG.

Cocofed is contesting a previous Sandiganbayan ruling that the SMC block of shares is owned by the government “in trust for coconut farmers.

Cocofed is insisting that it is the only coconut farmers’ group that should be adjudged as the owner of the SMC shares.

Because of the continued delay in the release of the cash dividends from the SMC shares, the CIIF OMG has not been able to fund several programs for coconut farmers.