The triumph of the Marcoses and Cojuangcos
THE SUPREME Court’s most recent ruling upholding the right of Eduardo “Danding” Cojuangco Jr. to own the disputed 20-percent bloc of SMC shares is an injustice. It is anti-farmer and anti-poor. Even worse, it signals the triumph of the Marcoses and the Cojuangcos in the lengthy resolution of the coco levy case.
Despite evidence to the contrary, the Supreme Court ruled that the aforementioned SMC shares were not ill-gotten and not linked to the coconut levy funds. Therefore, Danding now has the right to lay claim to these shares. It seems that both the Marcoses and the Cojuangcos can finally administer the shares that should belong to the coconut farmers after 25 years of conspiring to recover their loot, which they can now even claim to be legally acquired even if everyone familiar with the case knows that it is tainted.
Whichever way one looks at the disputed SMC shares, the source or origin of the funds that were used to acquire the SMC shares is undoubtedly from the pockets of the coconut farmers.
The total contested SMC shares were originally 51 percent. These shares were acquired in 1983 through loans and advances from the United Coconut Planters Bank (UCPB) and the Coconut Industry Investment Fund or CIIF. Both the UCPB and the CIIF were put up using capital generated from the coconut levy funds. According to the Davide-led Court, the coconut levy funds are public funds because these were accumulated through the power of the state. The collection of the coconut levy from 1973 to 1982 was made possible through a presidential decree called Coconut Consumers Stabilization Fund or CCSF. This tax was imposed on the coconut farmers a year after martial law was declared in 1972. To further strengthen their hold on the coconut levy funds, Danding and his principals—the Marcoses—named UCPB as the fund administrator and depository of the coconut levy funds. This was highly irregular because under normal circumstances the levy funds being public funds should have been deposited in a government-owned and managed bank.
When the Edsa uprising occurred, the new government intended to fully recover the entire 51-percent bloc of shares from SMC. But due to the manipulation of the people laying claim to these shares, these were partitioned into two which later mutated into three partitions—i.e. 27 percent, 20 percent and 4 percent. The 27 percent shares were originally 31 percent, which the Danding and Cocofed-Lobregat tandem tried to claim. Danding also maintained that the 20-percent shares were acquired through personal loans. The remaining 4 percent shares were part of the unsuccessful attempt to buy back the entire 31 percent shares in 1986. But when the Court declared that the whole transaction was irregular (as these involved sequestered shares) the buyer of the shares had already paid an amount equivalent to 4 percent shares. These shares are now considered sequestered treasury shares.
The subsequent Sandiganbayan and Supreme Court rulings on the partitioned SMC shares were opposing but not necessarily contradictory. It was as if the two Courts had already acceded to the proposed compromise which has been floating around since 2001—i.e. the 27-percent bloc will go to the government and the coconut farmers while the 20 percent will be granted to Cojuangco. Even some members of the Multisectoral Task Force on the Coconut Levy Recovery (MSTF) were approached by emissaries representing the Cojuangco camp several times in the past regarding this proposed arrangement.
The Sandiganbayan’s ruling on the 27 percent was clearly favorable to the government and the coconut farmers, as it declared that, “[e]ven granting that these were acquired through the UCPB loans, the said advances and loans are still the obligations of the said companies. The incorporating equity of capital of the 14 holding Companies, which were allegedly used also for the acquisition of the subject SMC shares, being wholly owned by the CIIF Companies, likewise form part of the coconut levy funds, and thus belong to the government in trust for the ultimate beneficiaries … all the coconut farmers.”
Meanwhile, the recent Supreme Court ruling on Cojuangco’s claim states that “… the block of shares in San Miguel Corp, in the names of respondents Cojuangco, et al. is the exclusive property of Cojuangco, et al. as registered owners.”
Yet, the funds used to acquire both the disputed 27 percent and the 20 percent were sourced from entities (i.e. UCPB and CIIF) that were capitalized by the coconut levy funds. Danding himself already acknowledged that the aforementioned entities provided the “loans” and “advances” in his acquisition of the 20-percent SMC shares. In short, he did not spend a single centavo to acquire these shares.
Danding was given a tremendous responsibility to protect the interest of the government and coconut farmers. He was entrusted with multiple key positions: president of UCPB, member of the CIIF, member of the Board of Directors of the Philippine Coconut Administration. His foremost job as the CEO of UCPB was to preserve the levy funds and protect the interests of the shareholders, government and coconut farmers. But the opposite happened. Danding, as guardian, conservator and administrator of the funds, acquired the “loans” and “advances” while he was an officer of the institutions—a violation of fiduciary duty. Yet the Supreme Court maintains that the 20-percent bloc of share was not acquired through ill-gotten means and practically absolved Danding of fiduciary violation.
We wonder: The final judgment on the ownership of the disputed 27 percent should have taken precedence over the 20 percent, which only affect the families of the Cojuangcos and the Marcoses. Yet this case remains unresolved. Perhaps this is reflective of the Court’s bias against the poor?
The Supreme Court’s current ruling on the disputed SMC shares is unacceptable.
(Omi C. Royandoyan is chair of Sentro Saka Inc.)
