MANILA, Philippines – There was no share sale deal between state-owned Land Bank of the Phiippines and the San Miguel Corp.
This was the statement released by Landbank following the filing of a plunder complaint against the bank’s officers before the Ombudsman over the reported 2008 deal on shares of the country’s largest power firm, Manila Electric Co. (Meralco).
“But the transaction did not materialize due to the unlawful cancellation by Adjudicator Miñas of Landbank’s share in Meralco. The Shares Purchase Agreement therefore was not at all implemented in 2008 and even now,” the bank clarified.
At stake then were Landbank’s 2,002,750 Meralco shares valued at around P2.5 billion in 2008. These shares were supposed to be sold to the San Miguel group, which was in bidding for control of Meralco’s board against the Lopez family and the group led by businessman Manuel V. Pangilinan.
However, these same shares were at the heart of a legal case involving Landbank and another party over a property that formed part of the Agrarian Reform program. The court found that Landbank’s P4 million valuation of the property is far less than the P157 million P157 million valuation by the Regional Agrarian Reform Adjudicator (RARAD) Conchita C. Miñas.
After the court favored the higher valuation, the Meralco shares held by Landbank for trading were used to pay just compensation to the landowners–Federico Suntay, the grandfather of Emilio Aguinaldo Suntay III, the plunder case complainant, and their assignee, Josefina Lubrica.
At the height of the Meralco boardroom battle, Landbank challenged this property valuation and payment at the Supreme Court. In December 14, 2011, Landbank said the high court ruled in their favor. It then ordered the levy on Landbank’s Meralco shares to be lifted so the share sale to the San Miguel group could finally push through.
“Emilio Aguinaldo Suntay III and his family stand to lose billions from this decision, which may have prompted him to file a baseless complaint in retribution,” Landbank said in the statement.
The bank also denied that it did not conduct due diligence and was not transparent when it was deciding whether to sell its Meralco shares to San Miguel at the time.
“Landbank maintains that it has practiced due diligence and transparency in this transaction…The shares, if sold at P90, in December 2008, when the prevailing market price was P57 per share, would have represented a hefty premium of 58% over market price, if it pushed through,” it said.
It denied that the deal would have put the government at a disadvantage for “exposing the government to risks of “more than P4 billion.”
Suntay is alleging that Landbank and the other government financial institutions that sold their Meralco shares to San Miguel denied the government of additional revenues since there was a better offer from the group of Pangilinan.
Unlike San Miguel, which paid for the Meralco shares over a span of 3 years, Pangilinan’s offered to pay the shares in cash.
The battle for control of the Meralco board was one of the most watched corporate story in the Philippines. Pangilinan’s group has since taken over the reigns of the firm, while San Miguel still holds a substantial minority stake in it.
Below is a copy of the plunder complaint.
Below is a copy of the share purchase agreement.