‘Government has money for SMC stock offer’

The Coconut Producers Federation of the Philippines debunked the claims of Finance Secretary Cesar Purisima that the government lacks sufficient funds to join the stock rights offering of food and beverage giant San Miguel Corp. (SMC).

Cocofed’s Jose Valmores said that cash dividends due the coconut farmers for their shares in SMC from 1986 to 2004 now amount to P9.5 billion and this is more than enough to purchase new shares.

SMC is offering one new share for every 10 currently held by stockholders. If the government fails to subscribe to the stock offering, its equity in the blue chip company will shrink by 10 percent.

In a five-page "demand letter" to the United Coconut Planters Bank (UCPB), the farmers’ group said the Coconut Industry Investment Fund (CIIF), which administers the assets, should subscribe to the SMC stock rights offering.

"The CIIF has more than sufficient funds to finance the exercise of their valuable preemptive rights to subscribe to the SMC stock rights offering," he said.

Valmores added that the farmers will be the ultimate beneficiaries of these shares.

Lawyer Marlou Urbano, another counsel for Cocofed, explained that Purisima estimates that the government needs only around P4 billion to P5 billion to participate in the stock rights offering.

"Actually, this (the CIIF fund) is more than enough," he told The STAR in a phone interview.

Valmores stressed that, having sequestered the government’s shares in SMC, the UCPB has the "positive legal duty to preserve and enhance the value of SMC shares of the 14 CIIF holding companies."

He also reminded the UCPB of the July 1991 resolution of the Sandiganbayan which directed the UCPB to "always act with due regard to the sequestered character of the shares involved as well as its fruits, more particularly to prevent the loss or dissipation of their value."

Valmores warned the UCPB that failure to join the stock rights offer would mean that it has "feloniously dissipated or diverted the said dividends."

"You may be prosecuted for large-scale estafa penalized with life imprisonment to death," he told UCPB.

He added that UCPB officials, in their capacity as administrators of the assets, could likewise be brought to court for "plunder penalized with maximum penalty of death under RA7080" since, as PCGG sequesters, they are considered public officers.

The national government controls seven seats in the 15-member SMC board, five of them held by the Presidential Commission on Good Government (PCGG), one each by the GSIS and the SSS while the remaining eight seats, which comprise the majority, are controlled by Cojuangco and his allies.