This is in reaction to the article dubbed, "PCGG approves conversion of government shares in SMC" that appeared on October 07, 2009.

It is very disappointing for the PCGG to cite the groups of coconut farmers under the wing of Bishop Capalla as the source of government's decision to convert the SMC common shares into preferred shares. These are the so-called farmers who have, in the past, collaborated with Eduardo "Danding" Cojuangco in compromising and hoodwinking the public about the public character of the fund. These are the farmers who were already discredited before. These groups are not even considered beneficial owners of the coco levy funds.

Contrary to PCGG Commissioner's allegation, the biggest and largest coconut farmers organizations who have been consistently fighting for the recovery of the coconut levy funds were not consulted. These groups include AM-Mindanaw, the Small Coconut Farmer's Organization (SCFO) headed by Mr. Rolando Bongbong, PAKISAMA and other  independent coconut farmers organizations in Luzon and Visayas. These organizations were left out in the so-called consultations conducted by the PCGG. Yet, PCGG Chair Camilo Sabio is aware of the presence of these groups. Abcede's reference to these groups as "a minority noisy faction" is but an effort to belittle the integrity of these organizations as well as to hide the conspiracy behind the hasty conversion of the shares.

This brings us to the decision of the Supreme Court on the issue. We are disillusioned by the Supreme Court's approval of the conversion of 753,848,312 common shares in San Miguel Corporation (SMC) to preferred shares. The move effectively marginalized the coconut farmers who are the beneficial owners.

Clearly, the Supreme Court's ruling is bereft of understanding of the hardships faced by the coconut farmers in recovering the coconut levy funds. The ruling also reeks of political accommodation by the court; it elevates the interests of Malacañang and Eduardo "Danding" Cojuangco above that of the small coconut farmers. In fact, a reading of the Supreme Court resolution would show that coconut farmers are barely mentioned.

The haste with which the ruling came out is very surprising, to say the least. Historically, decisions made relative to the coconut levy take a considerable amount of time, given the scope, complexity and the way in which it affects political interests in Philippine politics. What would then explain the court's extreme haste in granting the proposed conversion?

The ruling lacks an appreciation of the struggle of the coconut farmers to recover the coco levy funds and the manipulations done by Danding Cojuangco. The court needs to understand that the interest at play here does not simply rest with the government. The coconut farmers have a substantial and direct interest in the matter.

At the very least, the Supreme Court should have consulted the groups who truly represent the coconut farmers, particularly those who oppose any type of compromise agreement with Danding Cojuangco and who desire to pursue the full recovery of the coco levy funds. Instead, the court settled the issue by saying that the conversion is beneficial to the farmers. But how will the transaction be advantageous to the farmers when their right to vote is taken away from them and they are not represented in the board of directors? Worse, the purported earnings from the dividends are speculative and are not guaranteed, simply because it is just a promissory note.

If the Supreme Court and the proponents of the conversion believe that the move would result in higher returns, why did they propose the conversion of only the shares held by the CIIF Oil Mills? This court seems to be acting blind! This is not a simple conversion of shares. The whole transaction boils down to control. The court's assertion that the SMC would inevitably control the shares is untrue, for at the end of the day it is Danding Cojuangco who will gain ultimate control.

It is no secret that Cojuangco had long been gunning to take full possession and control of the coco levy funds. But his initial attempts were thwarted because of the high court's previous rulings which granted full ownership to the government and the small coconut farmers. With this latest ruling, the Supreme Court effectively reversed an earlier ruling in San Miguel Corporation v. Sandiganbayan (340 SCRA 289), wherein it struck down the proposed conversion of the same shares to treasury shares. The shares are sequestered! Thus, any move to permanently alter the character of these shares should not be allowed. Yet the Supreme Court has allowed this to happen. This is a grave injustice!

It now appears that PCGG conspired with the Office of the Solicitor General, Malacañang, and the SMC in pushing for the conversion of the SMC common shares into preferred shares.

Omi C. Royandoyan
Centro Saka, Inc.