The new nominees are former Court of Appeals Justice Hector Hofileña, former Presidential Security Group chief Gen. Leo Alvez, Channel 7 chairman Menardo Jimenez, former Nestlé Philippines chairman Juan Santos and former Nueva Ecija Rep. Pacifico Fajardo.
Presidential Commission on Good Government (PCGG) Chairwoman Haydee Yorac said the five new nominees will be elected this morning as SMC directors before the board convenes the stockholders’ meeting at nearby Valle Verde Country Club in Pasig City.
"We expect (from them) professional behavior in decision making. We expect that the directions should be the enhancement of the value of the shares, the successful implementation of business policies and from these areas, both sides are committed to cooperate with each other," Yorac noted.
Expected to be ousted from the SMC board are Estrada’s brother-in-law Raul de Guzman, movie producer Espiridion Laxa, Benjamin Paulino, Hermogenes Tantoco and Allan Lee, who held on to their seats even as their benefactor had been removed from Malacañang through a popular people’s revolt called EDSA II in January last year.
Yorac cited unconfirmed reports saying De Guzman’s group handed in their resignation.
The smooth transition of the five PCGG board seats in the SMC would come as a result of an interim agreement forged over the weekend between SMC chairman Eduardo "Danding" Cojuangco and the PCGG representing the government.
Yorac said the government would also have two directors each in SMC’s executive, audit and compensation committees, and one director in the nomination committee, as well as representatives in various SMC subsidiaries.
The subsidiaries are San Miguel Foods Inc., San Miguel Campo Carne Corp., Philippine Dairy Products, Monterey Food Corp., RightPac International Corp., San Miguel Yamamura Corp., Premium Packaging International, San Miguel Rengo Packaging Corp., La Tondeña Distilleries, San Miguel Properties Inc., Purefoods, Cosmos Bottling Corp., and Coca Cola Bottlers Philippines Inc.
The new nominees have been directed to work closely with the PCGG and report SMC transactions.
Yorac also cited the five new nominees as "professionals who know their job and experts in their own fields."
The PCGG-Cojuangco accord came amid an offer by the Japanese firm Kirin Brewery to buy 443 million unissued "B" shares in SMC for $540 million (roughly P27.9 billion).
The buy-in would make SMC the world’s fifth largest brewery in the world.
The agreement also enabled Cojuangco to retain management control over SMC for two more years "without prejudice and subject to the final resolution on the merits of all cases, as well as new cases that may be filed related to the (disputed) SMC shares."
Under the interim agreement pertaining to control of the 27-percent shares of the Coconut Industry Investment Fund (CIIF) in SMC, the government will be entitled to five seats in the SMC board, plus one seat each for the state-run SSS and Government Service Insurance System (GSIS).
But the government expressed concern that the Kirin buy-in would dilute the CIIF shares. The Supreme Court has ruled that the CIIF shares were bought with coconut levy funds which are classified as public funds.
The coconut levy, formally known as the Coconut Consumers Stabilization Fund (CCSF), was collected from small coconut farmers from 1973 to 1982 during the Marcos regime.
The amount, now estimated at some P130 billion, was believed to have reached P9 billion when it was last collected in 1982. A portion of the levy funds was allegedly used to acquire majority or sole control of several companies.
According to the PCGG, some of the corporations created or acquired through the levy funds were the United Coconut Planters Bank (UCPB), Philippine Coconut Producers Federation Inc., Cocofed Marketing Corp., Cocofed Life Insurance Corp. and United Coconut Oil Mills Inc.