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By Likha C. Cuevas-Miel And Euan
Paulo C. Añonuevo Reporters
Not backing down from his foe’s
defiant stance, Winston Garcia is pushing harder for the takeover of
the biggest power distributor in the Philippines by filing another
case with the Securities and Exchange Commission (SEC) to nullify
the votes cast by shareholders Tuesday.
On Wednesday, the Government
Service Insurance System (GSIS) submitted before the regulator an
urgent motion to confirm or declare the “correct” results of the
Manila Electric Co. (Meralco) election of its board of directors.
The motion also called on the SEC to recognize the results tabulated
by the state pension fund instead of those announced by the
Lopez-owned utility.
But Meralco stuck to its guns a
day after its owners retained control of the board of the
country’s biggest power distributor.
“What we have done is legal. No
sanctions can be imposed on us,” Monico Jacob, head of Meralco’s
regulatory management, said also on Wednesday. He was referring to
the supposed propriety of the election for members of the board on
Tuesday and to the supposed lack of jurisdiction of the government
regulator to stop the Lopezes from conducting the voting.
During a briefing, Garcia, the
GSIS president and general manager, said the conduct of the election
was not null and void but “what was illegal was the inclusion of
the disqualified proxies as part of the counting of votes when they
counted the votes in favor of the five regular directors of the
management of Meralco.”
The case filed by GSIS said there
were 1,900,503,506 votes as tabulated and counted by SyCip, Gorres
& Velayo (SGV) which were deemed “illegal”by the state fund
and were covered by the cease-and-desist order issued by the SEC
during the stockholders’ meeting.
The proxy votes, Garcia said,
were cast in favor of management’s nominees that included Felipe
Alfonso, who garnered 380,100,701 votes, while Meralco President
Jesus Francisco, Christian Monsod and Ceasar E.A. Virata got
also got the same number of proxy votes. Meralco Chairman Manolo
Lopez got 380,100,702 of the contested votes.
These proxy votes were counted to
“make it appear that they have more votes cast in their favor than
they were entitled to, to the prejudice of Mr. Eusebio Tanco, who
was supposed to occupy the remaining slot for the position of
regular director,” the GSIS claimed in the case filed with the
SEC. Tanco was nominated by Philippines First Insurance Co. Inc., an
ally of Garcia.
By counting the contested proxy
votes, the Lopezes would dominate the board by outnumbering
Garcia’s people by five to four.
Manolo Lopez garnered the highest
number with 1,127,678,989 votes, followed by Francisco with
1,126,178,458 votes and by Monsod with 1,125,566,968 votes. Other
management nominees who got the top five seats were Alfonso with
1,114,346,945 votes and Virata with 1,048,255,085 votes.
The last four seats are then
occupied by the GSIS and Philippines First nominees: Garcia
(943,843,841 votes), Daisy Arce (941,272,988), Bernardino Abes
(939,777,838) and Jeremy Parulan (927,120,201).
But, if the disqualified proxies
were not included in the counting as prescribed under the SEC
injunction, the votes would swing in favor of Garcia’s camp as it
would occupy the first five board seats with the inclusion of Tanco,
who supposedly got 747,578,287 votes.
The last four seats would then be
occupied by the Lopez camp, excluding Virata.
“The results declared by
respondent Rosete has led to the confusion of the public as to the
actual results of the election, thereby also resulting in confusion
as to who has the majority in the board for the purpose of
organizing and appointing the key officials of the company,” the
GSIS told the SEC in its motion. Rosete is Anthony Rosete, who acted
as acting corporate secretary during the stockholders’ meeting.
“Mr. Manolo Lopez should not be
allowed to get away with his arrogance. The stance of Mr. Manolo
Lopez and his management team seems to make it appear to the whole
world that they can defy the law, they can defy the orders of a duly
constituted authority because they are above the law. This kind of
behavior should not be tolerated in this society,” Garcia said.
He added that instead of defying
the SEC order, the Meralco management should have filed a case
before the Court of Appeals to question the order. “Unless the
temporary restraining order is issued, we should follow the lawful
order of the SEC,” the GSIS chief added.
As soon as the SEC confirms that
the board composition favors Garcia’s camp, the GSIS will soon
take over the board and effect the changes that he announced the day
before to help lower the cost of electricity by as much as 20
percent.
If these changes are not realized
in two months, Garcia said his team will resign from the board.
With the Lopez Group’s clout
over the country’s largest distribution utility reaffirmed by the
recent board election, company officials also on Wednesday said they
are hoping that tirades from Garcia against Meralco will finally be
over.
“We are hoping that people will
come to their senses and this [dispute with Garcia] will all be
settled,” Jacob said.
He added that Meralco is ready to
stand by its decision to push ahead with the board election despite
the SEC injunction.
Meralco said the order from the
SEC that was issued shortly before the voting began, was “null and
void.” It cited the regulator’s supposed lack of authority to
meddle in “intra-corporate issues” as jurisdiction over such
matters was long transferred to the regular courts under the
Securities and Regulation Code. The injunction had sought to prevent
Meralco from counting proxy votes in favor of the Lopez Group.
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