Landbank defends sale of Meralco shares to SMC Global

Posted at 09/25/12 8:12 PM

MANILA, Philippines - The Land Bank of the Philippines on Tuesday defended its sale of Meralco shares to San Miguel Global Power Holdings Corp. (SMC Global).

This comes a day after a plunder complaint was filed before the Office of the Ombudsman against SMC Global officials, former Land Bank chairman Margarito Teves and current Land Bank president Gilda Pico, which alleged the deal was disadvantageous to the government.

In a statement, Land Bank said it practiced due diligence and transparency in the sale of Meralco shares to SMC Global.

The plunder complaint, filed by Emilio Aguinaldo Suntay, was based on the 2008 share purchase agreement (SPA) that Land Bank entered into with SMC Global for the purchase of more than 46 million shares in the publicly-listed firm for P4 billion.

The agreement allowed SMC Global to purchase the shares in three installments over three years at a price of P90 per share. The last was due on January 31 this year. The SPA, nonetheless, has long been cancelled.

Suntay claimed he has documents proving that the Land Bank officials merely accepted the terms of SMC Global sans the benefit of due diligence. He said that the government financial institution ignored a “better” cash-based offer of P90 per share made by Metro Pacific Investments Corp.

In response, Land Bank said there is no alleged "conspiracy" among Teves, Pico, Ramon Ang, Roberto Ongpin, Atty. Estelito Mendoza and Justice Lucas Bersamin. The bank noted the ruling in favor of Land Bank can withstand the "most intense legal scrutiny."

Land Bank officials believe Suntay's complaint is connected to the charges it filed on March 18, 2009, before the Office of the Ombudsman for plunder and violation of the Anti-Graft and Corrupt Practices Act, against Regional Agrarian Reform Adjudicator  Conchita C. Miñas and other parties, including Josefina Lubrica who is an assignee of Federico Suntay, grandfather of the complainant. 

"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," Land Bank officials said, in a statement.
The case stemmed from the unlawful cancellation and transfer of Landbank's 42,002,750 Meralco shares valued at around P2.5 billion in 2008 in favor of Lubrica.

Land Bank had earlier challenged before the Supreme Court the unlawful cancellation of its Meralco shares, which are not aprt of the Agrarian Reform Fund, for the payment of just compensation to landowners.

In a decision last December 14, 2011, the Supreme Court ruled in favor of Land Bank, affirming the orders diercting Meralco to cancel the stock certificates issued to Lubrica, saying the "the levy of Land Bank's Meralco shares was void and ineffectual."

The High Court also declared that "Land Bank is entitled to all dividends to the invalidly levied shares of MERALCO." (Land Bank of the Philippines v. Federico Suntay, as represented by his Assignee, Josefina Lubrica, G. R. No. 188376, December 14, 2011).