by: Betsy Arvesu

San Miguel Corporation shareholders recently approved of the Japanese beer firm Kirin Brewery Co. Ltd.’s purchase of 15 percent in SMC shares worth PhP 27.88 billion (US$542.898 million).

Kirin’s entry has caused concerns of diluting the government’s shares in SMC, however, as earlier agreed upon the government voted in favor of Kirin’s buy-in of SMC shares, while San Miguel Chairman Eduardo Cojuangco did not block government’s appointees to the San Miguel board.

The government voted through the Presidential Commission on Good Government (PCGG) with its 27 percent sequestered block in SMC held by the Coconut Industry Investment Fund (CIIF).

The Philippine government originally sequestered 47 percent block in SMC in 1986 on suspicion that the shares were amassed using funds illegally collected from coconut farmers. Cojuangco claims the 20 percent and the court granted him voting rights, although its real ownership is still under litigation. The coconut farmers and a private coconut producers group claim the other 27 percent, which the government currently holds.

Where have the farmers gone?

Coconut farmers are questioning the appointment of five new directors to the SMC board.

“We praise PCGG and Chairman Haydee Yorac for appointing the new directors, but we don’t know them. The chairman of the PCGG should explain why the coconut farmers have no representation in the board,” said Hjalmar Quintana, former Quezon Assemblyman, during the open forum held before the voting.

Quintana also asked Cojuangco to invite coconut farmers to SMC board meetings so that farmers may understand developments in the company.

PCGG chair Haydee Yorac told reporters that coconut farmers are represented in the United Coconut Farmers Bank (UCPB) board.

The government controls seven seats in the 15-man board inclusive of the Social Security System (SSS) and (Government Service Insurance System). The five new directors represent the CIIF and have been selected by President Gloria Macapagal-Arroyo.

Arroyo expressed its inclination to sell the government’s stake in SMC and stressed that government should not be involved in business. She said proceeds of the sales would be used for the benefit of coconut farmers.

SOURCE: Reports by Shirley L. Flores and Norman P. Aquino