Three days before the national elections in May, the Sandiganbayan ruled that a 27 percent stake in the country’s largest brewer belonged to the government. The shares originally held by 14 companies under the Coconut Industry Investment Fund (CIIF) were “declared owned by the government in trust for all the coconut farmers and ordered reconveyed to the government.” The graft court, however, has yet to decide on the disputed 20 percent held by Cojuangco which were allegedly bought using coconut levy funds.

San Miguel Corporation (SMC) chairman Eduardo Cojuangco asked for the reversal of the decision. He said the graft court just echoed an earlier Supreme Court ruling that the funds used to buy the shares were public monies that came from taxes coconut farmers paid in the 1970s. His counsel, Estelito Mendoza, argued that the court’s partial summary judgement was not conclusive. He wanted a full-blown trial on the case. But the graft court told defense lawyers that they had the burden of proof to “show how the public funds have legitimately become their private property.”

The Presidential Commission on Good Government (PCGG) sequestered 47 percent of SMC shares in 1986, claiming it was acquired with coco-levy funds and had been illegally controlled by Cojuangco and other cronies of Former President Ferdinand Marcos. Cojuangco regained provisional control of SMC after a compromise deal with the Estrada administration in 1999. He controls the 15-seat board of directors through the three seats from the 20 percent that he holds and through other stockholders who support him.

The government has seven seats on the 15-member board. Elected to the board were PCGG representatives Leo Alvez, Pacifico Fajardo, Menardo Jimenez, Octavio Victor Espiritu, and Egmidio de Silva Jose. The state-run pension funds, the Social Security, and the Government Service Insurance System, also have one board seat each as shareholders. Other elected directors are Ramon Ang, Estelito Mendoza, Manuel Cojuangco, Iñigo Zobel, Shigeki Ota, Hitoshi Oshima, and Henry Sy, Jr.

Despite Cojuangco’s control of the board, PCGG chairperson Haydee Yorac is confident that the remaining unclaimed shares acquired using the coco-levy funds will be returned to the government. Hence, a legal battle remains in the horizon.