A Philippine presidential commission today seized 33.1 million shares of the country's largest private company, the San Miguel Corp. brewery, on grounds that a leading associate of deposed president Ferdinand Marcos was secretly involved in a recent controversial transaction as the buyer and seller of the shares.
The order by the Presidential Commission on Good Government to "sequester" the shares, which comprise 30 percent of outstanding capital stock and give the commission effective control of San Miguel, highlighted a growing public debate about the role in private business of President Corazon Aquino's government as it tries to recover the wealth of Marcos, his family and associates.
The sequestration order was sharply protested by Defense Minister Juan Ponce Enrile, who has been at loggerheads with the commission over moves to intervene in a telecommunications company in which he has a financial stake.
Enrile supported the argument of acting San Miguel chairman Andres Soriano III that the 33.1 million shares in question were owned by 1.4 million Philippine coconut farmers and not by Eduardo M. Cojuangco Jr., the country's wealthiest businessman and a leading associate of Marcos. Enrile is chairman of the United Coconut Planters Bank, which supposedly represented the coconut farmers in the transaction. Cojuangco for many years held a leadership position in the bank.
In one of the largest stock-exchange deals recorded here, Soriano nominally purchased the shares April 1 from the farmers for nearly $166 million, amounting to a per-share price nearly four times higher than the shares were trading for at the time. Soriano, 35, whose wealthy family had long controlled the beer and food conglomerate, said he was acting on his own behalf and as an agent for unidentified investors in the purchase.
However, the good government commission said it uncovered "conclusive evidence" that the shares were owned by Cojuangco, who had acquired them from Soriano's father in a 1983 takeover battle.
The commission also reported that the actual buyer in the April 1 deal was the Hong Kong-based Neptunia Corp., a fully owned subsidiary of San Miguel. Cojuangco is listed as a director of Neptunia, according to commission member Ramon Diaz.
"Clearly these were Cojuangco shares," Commissioner Mary Concepcion Bautista said of the April 1 deal. "The transaction was very questionable."
According to business sources, the sequestration of shares today, and an earlier takeover of 18 million San Miguel shares from Cojuangco, give the commission the power to fill eight of the 15 seats on the corporation's board of directors. However, the commission insists it has no intention of trying to run the conglomerate, which brews San Miguel beer and bottles Coca-Cola in the Philippines among its diverse interests.
Bautista said the commission acted after minority San Miguel stockholders complained that the Soriano group misrepresented the terms of the sale and asked the commission to sequester the shares. The block of shares had been sequestered briefly before, but the order had been revoked when the commission was assured that Cojuangco did not own the shares.