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As ANC’s Business Nightly continues to tackle the implications of the recently converted block of shares in San Miguel Corporation, representatives of 2 groups that approved the share conversion justified their decisions on Wednesday.
 
Robert Benares from San Miguel’s financial advisor, ATR-Kim Eng, said that the conversion—from common shares that represented 24% direct stake with voting powers in the diversifying conglomerate, into preferred and non-voting shares—was a way out for shareholders who are not comfortable with the changing business model of the conglomerate.
 
The “uncomfortable shareholders” included some coconut farmer groups who have been contesting the ownership of the shares for over 2 decades.
 
Benares said the carrots to these “unhappy” and “uncomfortable” shareholders were the fixed and tax-free dividend returns of 8% a year, and a fixed price of P75 per share that represented some 44% premium over the stock’s trading price at the time of the offer.
 
For his part, Ricardo Abcede, a commissioner of the disputed shares’ caretaker, the Presidential Commission on Good Government, stressed that only a “noisy minority” of the 3 million coconut farmers are against the share conversion.
 
Abcede said that the government should allow the Cojuangco group, who has been disputing the farmers’ ownership claim on the shares, to continue running the company well. “The government should not be running a business,” he said.
 
Nonetheless, Abcede said that the Cojuangco group has promised that the government could still retain its 4 seats in the San Miguel board even if the shares no longer have voting privileges.