Danding Cojuangco didn’t deceive or steal money from coco farmers – Posted from The Manila Times.Net

Danding Cojuangco didn’t deceive or steal money from coco farmers.

Written by TONY LOPEZ

THIS Friday, October 5, San Miguel Corp. will redeem P72.7 billion in preferred shares of the beer, food and diversifying conglomerate, bringing closure to the largest, longest-running, most controversial and most contentious alleged ill-gotten wealth case filed against a Marcos-era tycoon.

The P72.7 billion represents the 24 percent of SMC common shares ordered converted into preferred shares by the Supreme Court in 2009. The Prefs were redeemable in three years. That falls this Friday, Oct. 5. SMC exercised its option to redeem the shares, borrowing P80 billion by issuing a new batch of preferred shares.

The 24 percent has earned P22 billion in dividends since 1983, a period of 29 years. Add the P22 billion to the P72.7 billion and you get P94.7 billion – the total earnings hauled in by the government in 29 years, without the state investing a single centavo. In effect, Cojuangco gave away P94.7 billion to some one million unnamed coconut farmers.

Cojuangco needed only P1.65 billion to acquire the 24 percent (originally 31 percent) in 1983. That’s a return on investment of 200 percent in 29 years – an annual yield that cannot be matched by any company in the Philippines today. A 200 percent return is equivalent to tripling your investments every year for 29 years.

Cojuangco’s group bought the 31 percent of San Miguel from the late Andres Soriano Jr. and taipan John Gokongwei Jr.

Gokongwei was barred by the Supreme Court from being a director of SMC because he was a competitor. He sold his shares to Soriano who paid just P30 per share. Soriano, in turn, sold the shares—totaling 33.1 million to Cojuangco at P50 per share at a time when San Miguel was doing P22 per share in the stock market. The 33.1 million shares, at P50 each, amounted to P1.655 billion. The P1.65 billion was funded by a deposit of San Miguel in the United Coconut Planters Bank of P500 million, in preferred shares, and commercial deposits, including the daily cash flows (about P200 million) from San Miguel’s operations. It was a leveraged buyout.

To finance the deal, SMC placed P500 million in preferred shares in UCPB. The balance of P1.155 billion was borrowed from UCPB as commercial loan using deposits placed by SMC in UCPB.

Aside from the 31 percent, Cojuangco bought another block, 20 percent, for himself and his group of companies, using his earnings from coconut exports (then the country’s biggest dollar earner). This 20 percent block came from the Zobel-Ayala family. In effect, Danding acquired 51 percent of SMC, majority control.

The 31 percent was originally placed in the name of six coco oil mills which bought them from 14 holding companies organized by Cojuangco. The coco oil mills in turn borrowed from the Coconut Industry Investment Fund (CIIF) managed by the United Coconut Planters Bank.

After People Power in 1986, the government sequestered the 51 percent, claiming it was funded with coco levy money – the 20 percent of Danding Cojuangco and the 31 percent. The 31 percent later became 24 percent because the government failed to participate in capital increases of SMC and even collected a one percent fixing fee.

Cojuangco insists that in buying the 31 percent, he used borrowed money from commercial deposits placed by a group of 11 coco exporters in UCPB which his group had put up in 1975 as a bank for the coconut industry (then the country’s biggest export), using an option to buy the 72.2 percent of First United Bank from Jose Cojuangco Sr., the father of Corazon Cojuangco Aquino.

Mixed with the commercial deposits with UCPB were coco levy collections which were also deposited with the bank, being the trustee of the levy collections. This mixup has caused the ownership confusion. It’s like you depositing your money with Metrobank and claiming you also own Toyota, Federal Bank and other companies because Metrobank had invested in these companies.

Also you can ask the question, if you borrowed a loan from Metrobank and you bought a Toyota with it, does it mean the lender should be paid with your Toyota? No, said the Supreme Court in its April 2012 ruling on Cojuangco’s 20 percent. Cojuangco and his group paid the P1.6 billion loans, with corresponding interest.

Meanwhile, when one speaks of coconut farmers, they were really the coco planters because they were the ones producing the coconut products, not the ordinary dirt-poor farmers who could not afford to pay any kind of levy.

In April 2011, the Supreme Court declared Cojuangco was not a crony and that the 20 percent really belonged to him. In January 2012, the Supreme Court denied the claim of the coconut federation Cocofed to the 24 percent and declared it belonging to unnamed coconut farmers.

Cojuangco and his group had been denied ownership of the 24 percent and its dividends. He now considers the P94.7 billion as his gift to the millions of coconut farmers most of whom are impoverished today. He did not deceive the coconut farmers. He didn’t steal money from the coconut farmers.

It’s time for the government to give to the coconut farmers the P94.7 billion it earned from Cojuangco’s P1.6 billion.


By 5thdistrictpangasinan Posted in Others

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