CIIF-Oil Mills Group seeks clarification on SMC shares

MANILA, Philippines - The CIIF-Oil Mills Group (OMG) is seeking clarification from the Office of the Solicitor General on whether it can still treat the block of San Miguel Corp. (SMC) shares as assets of its 14 holding companies in relation to a Supreme Court decision.

CIIF OMG president and chief executive officer Jesus Arranza said in a letter dated Dec. 6 to Solicitor General Francis Jardeleza that the group wants clarification on how the SMC shares, totaling 753.85 million, should be treated given the decision issued by the Supreme Court that the CIIF companies, its 14 holding firms and the block shares are owned by the government.

In particular, the CIIF OMG asked whether its 14 holding companies should continue to recognize the cash dividends on, and the proceeds of the redemption price for, the CIIF block of SMC shares as assets and whether the CIIF OMG companies should continue to consider the shares of stocks in the holding companies as its assets.

“We respectfully await your answers and clarification on said queries to guide us on the matter and to enable the CIIF OMG companies and the 14 CIIF holding companies to adequately prepare and work out the implementation of the Supreme Court’s aforesaid decision,” Arranza said.

The Supreme Court in its decision dated January 24, 2012 said that the CIIF companies, the 14 holding firms and the 753.85 million SMC converted preferrd shares together with all dividends declared, paid or issued, are declared owned by the government.

The assets to be used only for the benefit of all coconut farmers and for the development of the coconut industry.

The CIIF companies are the Southern Luzon Coconut Oil Mills; Cagayan de Oro Oil Co., Inc.; Iligan Coconut Industries, Inc.; San Pablo Manufacturing Corp; and Legaspi Oil Co., Inc.

CIIF’s 14 holding firms are Soriano Shares, Inc.; ASC Investors Inc; Roxas Shares, Inc.; ARC Investors, Inc,; Toda Holdings Inc,; AP Holdings Inc; Fernandez Holdings, Inc.; SMC Officers Corps,Inc.; Te Deum Resources, Inc.; Anglo Ventures, Inc.; Randy Allied Ventures, Inc.; Rock Steel Resources, Inc.; Valhalla Properties Ltd., Inc.; and First Meridian Development, Inc.

Prior to the January decision, the Supreme Court had directed that the cash dividends on, and the proceeds of the redemption price for, the CIIF block of SMC shares should be deposited in escrow pending the final determination of the ownership of the shares.

That order was contained in a resolution dated September 2009.

In accordance with the Supreme Court’s directive in September 2009, the Presidential Commission on Good Government (PCGG) through Resolution No. 2011-005-830 dated February 2, 2011, approved the opening of an escrow account with the United Coconut Planters Bank (UCPB).

Total remittances made by SMC to this account representing cash dividends on the CIIF block of shares amounted to P12.44 billion as of end-September this year.

In October, SMC redeemed the CIIF block of shares for the aggregate price of P56.54 billion.

To date, the escrow account which is in the name of the “Republic of the Philippines represented by the PCGG in-trust-for the 14 CIIF Holding Companies” is still being maintained with UCPB.

The remittances and payments made by SMC are likewise still recorded as assets of the 14 CIIF holding firms at present.