Farmers may soon get coco fund shares as SC upholds decision

With the Supreme Court sustaining its decision regarding roughly 750 million sequestered preferred shares in San Miguel Corporation (SMC), coconut farmers may soon be able to benefit from the billions of pesos earned from the shares. The high court affirmed its January 24 decision that the shares, bought with coconut levy funds and registered in the name of the CIIF (Coconut Industry Investment Fund) Oil Mills Group, and the CIIF companies themselves, are the property of the government. “This ruling now allows the government to finally plan and decide on how to utilize these assets for the benefit of our coconut farmers and the development of the coconut industry,” CIIF Oil Mills Group president and CEO Jesus L. Arranza said in a statement. The January 24, 2012, decision itself upheld a 2004 decision of the Sandiganbayan naming the government the owner of said assets. Records show that the six CIIF OMG companies are the parent companies of the 14 holding companies that are the registered owners of the SMC shares. The 6 CIIF OMG companies are Legaspi Oil Company Inc., San Pablo Manufacturing Corporation, Cagayan de Oro Oil Co. Inc., Southern Luzon Coconut Oil Mill Inc., Granexport Manufacturing Corp. and Iligan Coconut Industries, Inc. San Miguel had officially advised the CIIF that it plans to redeem all of the SMC shares owned by the Group on October 5, 2012. With the agreed redemption price of P75 per share, San Miguel will be paying about P56 billion for these shares. “I respectfully appeal to President Benigno Aquino III and the leaders of Congress to immediately convene the Legislative & Executive Advisory Council (LEADAC) to meet and discuss the government’s road map to alleviate the plight of our coconut farmers as well as develop the coconut industry, “Arranza said. He noted that some bills now pending in both the Senate and House of Representatives seek to privatize all the companies or assets organized, acquired or funded using the coco levies collected during the time of President Marcos. There is also a proposal from the Cabinet for the President to issue an executive order directing the proceeds of Groups’s SMC preferred shares to be deposited in a trust fund, he added. “Since both executive and legislative branches have the same basic objective, our leaders should sit down together to agree on a common and concrete plan and whether this plan should be implemented through the passage of a new law or through an executive issuance,” Arranza said. He added that in any case, he is supporting the recommendation of Senate President Juan Ponce Enrile that the proceeds of the privatization and the redemption of the SMC shares be utilized to purchase treasury bonds or other government securities. Computed, the proceeds of the SMC share redemption will amount to about P70 Billion inclusive of the cash dividends now in escrow with United Coconut Planters Bank. “Putting them in government securities will translate to an income of roughly P3 to 3.5 billion a year for a trust fund that can sufficiently finance projects for the welfare of the coconut farmers and development of the coconut industry such as coconut planting/replanting, inter-cropping & other livelihood projects, & research and development for high-value products,” Arranza said. He added that investing in securities and bonds will also help augment government’s coffers and ensure that the proceeds will not be misused and that only the yield is utilized. — BM, GMA News