SMC's Estrada nominees face vote

SMC chairman Eduardo Cojuangco

In this story: Appointees refuse to resign GSIS wants ownership resolved Power shift RELATED STORIES, SITES

MANILA, Philippines -- A Philippine state pension fund is seeking proxy votes to replace eight board members of food and beverage giant San Miguel Corporation.

The board members were appointed by disgraced former president Joseph Estrada.

The Government Service Insurance System (GSIS) said the administration of Glorial Arroyo, who took over from Estrada, wants to appoint its own nominees and gain control of the 15-member board of San Miguel.

This will pave the way for the ouster of the firm's chairman, Eduardo Cojuangco, a known ally of Estrada.

In a full-page newspaper advertisement, GSIS said it wants proxy votes for the May 3 shareholders meeting to get five new nominees of the Presidential Commission on Good Government (PCGG) elected to the company's board.

PCGG is the agency tasked by the government to retrieve ill-gotten wealth amassed by the family and associates of the late dictator Ferdinand Marcos.

Appointees refuse to resign

The government has resorted to soliciting proxy votes as the Estrada appointees to the San Miguel board have refused to resign and the firm's management has nominated them for another one-year term.

GSIS, together with another state pension fund Social Security System (SSS), already holds two seats reserved for independent directors on the San Miguel board.

But GSIS said it also wants to get a government nominee elected for the post of a third independent director, bringing to eight the number of government-controlled representatives on the San Miguel board.

GSIS said by controlling the San Miguel board, the government wants to protect the interests of GSIS and SSS members, minority stockholders, and small coconut farmers who are the beneficial owners of the San Miguel shares entrusted to the government.

GSIS wants ownership resolved

GSIS also said the government wants to finally resolve questions of ownership hounding the firm and accelerate its privatization.

In 1986, the government of then president Corazon Aquino sequestered 47 percent of San Miguel shares, including the 20 percent block Cojuangco claims as his personal investment.

The shares were alleged to have been amassed by Cojuangco's group using money collected from coconut farmers.

Cojuangco regained control of San Miguel in 1997 when the Supreme Court granted him voting rights over his contested stake. But ownership of the 20 percent block he claims is still the subject of a court battle.

Power shift

Cojuangco is not bothered by the government's moves to oust him. However, he stressed that his concern is how the market would react to a power shift in the firm.

Equities analysts in the Philippines favor Cojuangco staying on as the chairman of San Miguel, after successfully rebuilding the company.

They said it was unfortunate that Cojuangco could be ousted for political reasons, after revitalizing San Miguel and making it immensely profitable.

Reuters contributed to this report.

Arroyo team wants new chair for SMC
April 2, 2001
San Miguel to buy Ayala food unit
March 8, 2001
San Miguel, CCA set for share swap
January 28, 2001

San Miguel Corporation
GSIS
Philippine Social Security System Web Site
The Philippine Coconut Industry and the Coconut Levy

Note: Pages will open in a new browser window

External sites are not endorsed by CNN Interactive.