SC affirms government reconveyance of coco levy funds

MANILA, Philippines - The Supreme Court (SC) has upheld government’s re-conveyance of the 24 percent block of shares or a total of 753.8 million shares in San Miguel Corp. (SMC) acquired through coconut levy funds and registered in the names of the Coconut Industry Investment Fund (CIIF) and its holding companies.

Voting unanimously in full-court session yesterday, magistrates of the high court affirmed the 2004 decision of the Sandiganbayan that had found the subject shares to be ill-gotten during the time of the late strongman Ferdinand Marcos.

The Presidential Commission on Good Government (PCGG) hailed the ruling. In a statement, PCGG chair Andres Bautista said, “Finally a measure of justice has been dealt to the long-suffering Filipino coconut farmer. The new PCGG is committed to ensuring that the monies that represent these shares should now be used to alleviate his plight and rehabilitate the coconut industry.”

The SC ruling penned by Justice Presbitero Velasco Jr., which was not yet released to media yesterday pending completion of signatures of the justices, held that the CIIF shares in SMC valued at about P50 billion to P100 billion should be used for the benefit of the country’s coconut industry and its farmers.

Ten justices concurred in this ruling: Chief Justice Renato Corona and Justices Lucas Bersamin, Mariano del Castillo, Roberto Abad, Martin Villarama Jr., Jose Perez, Jose Mendoza, Ma. Lourdes Sereno, Bienvenido Reyes, and Estela Perlas-Bernabe.

Senior Justice Antonio Carpio inhibited because he was one of the petitioners – before he joined the SC – in a case to declare the coconut levy public funds.

The SC had ruled that coconut levy is imbued with public interest.

Justices Teresita Leonardo de Castro and Diosdado Peralta also inhibited because they were members of the Sandiganbayan that decided the case. Justice Arturo Brion, on the other hand, was on official leave.

The said SMC shares had been ordered by the high court converted from common shares to preferred shares through a ruling last Sept. 17, 2009.

The Court noted that the PCGG has held on to the sequestered shares for more than 20 years and may be the right time now for it to relinquish its role in the corporation in light of the claim that the sequestration of the CIIF SMC shares “has frightened away investors and stunted growth of the company.”

The conversion, the SC added, is necessary to preserve the value of the 753,848,312 sequestered CIIF SMC common shares in light of the worldwide economic crisis that started last year and adversely affected the country’s banks and financial institutions, resulting in billions of loses.

Also, in a resolution issued early last year, the Court declared final its decision declaring that the 20 percent shares of businessman

Eduardo Cojuangco Jr. in SMC are legally acquired, contrary to the government’s claim that it is ill-gotten wealth, being part of the coco levy funds of the farmers.

It added that the government failed to present evidence that would substantiate its allegations that Cojuangco’s shares in SMC are part of the ill-gotten wealth of the Marcoses.