Naia-3 expropriation route costly

The government’s predilection to shoot itself in the foot is now beginning to unravel with the expropriation route it had taken on the Naia-3 Terminal project.

That expropriation route, which former Securities and Exchange Commission (SEC) chairman Perfecto Yasay Jr. pointed out before, is an erroneous argument, is about to deliver the death knell to two offshore cases brought against the government. Mr. Yasay, counsel for the Asia Emerging Dragons Corp., had criticized the expropriation route as it would not entail the opening of the books of the terminal builder, Philippine International Air Transport Corp. (Piatco).

These two offshore cases are the investment claim of $425 million which Piatco partner, Fraport AG of Germany, brought against the government before the International Court for the Settlement of Investment Disputes (Icsid) and the $565-million claim of Piatco before the International Chamber of Commerce International Court of Arbitration.

Mr. Yasay had argued that the expropriation route is a wrong way for the government to resolve the questions that hounded the terminal construction, ranging from overbillings to ownership issues and the unsafe construction methods to assertions on the disadvantageous deals for the government.

Now, legal points that the government should have taken to bolster its case are finding their way in the legal briefs that the government have submitted before the offshore courts. In the defense filing, for instance, before the international court in Singapore that Piatco initiated, the government admitted to the fraud that characterized the bidding process for the terminal. Even the role of one PR practitioner identified as Alfonso Liongson was smoked out in the government pleadings. In fact, even the money trail was uncovered in the government submissions.

The government’s bad hand in the two offshore cases that could cost $990 million in judgment against the republic was underscored by Rep. Salacnib Baterina through lawyer Jose Bernas. An intervenor in the expropriation case, Representative Baterina, speaking through Bernas, had argued that the ownership issue should first be settled. Now, with the recent ruling of the Court of Appeals against the legal bar to the Pasay City Regional Court order for the payment of P3 billion to Piatco, the government’s worst nightmare over the two offshore cases may soon come about. 

Cojuangco dividends

It would be wise for the government to now initiate garnishment proceedings on the assets of former Philippine Long Distance Telephone Co. chairman Antonio “Tonyboy” Cojuangco with the order of the Supreme Court for the reconveyance of the shares registered under Philippine Telecommunications Investment Corp. (PTIC), shareholder of PLDT.

The High Court had ruled on the reconveyance as it affirmed that the PTIC shares registered under Prime Holdings is part of the ill-gotten wealth of the Marcoses. Since the shares were to revert to the government, through the Presidential Commission on Good Government (PCGG), then the dividends that accumulated through the years should be returned by the Cojuangcos to the government.

Anyone familiar with the workings of the stock market would know that there are dividends that have accumulated over the years for PLDT, which before the Marcoses left in a huff, was only valued at P28 per share. This can easily be traced and it would be easy for the government to have a handle on how much in cash dividends and stock dividends have accrued to the Cojuangcos. We understand that over P5 billion worth of dividends have been paid to Prime Holdings, by way of PTIC, from the telephone giant. This is what the government should run after and it could start with garnishment proceedings on the identified assets of the Cojuangcos.

The dividends, when “reconveyed” by the Cojuangcos, could be used to fund the government’s projects which could benefit even the poor. This is the right thing to do on account of the Supreme Court decision citing that the Prime Holdings shares in PTIC, the shareholder of PLDT, formed part of the ill-gotten wealth of the Marcoses. It will be recalled that Tonyboy’s father, Ramon, was chairman of PLDT on account of the Prime Holdings stake of the Marcoses. Later on, Tonyboy ascended to the chairmanship, a position he later relinquished.

That chairmanship position and subsequently the directorship was relinquished by Tonyboy when the Supreme Court decision made the ruling. The question that is now being asked is when would Mr. Cojuangco relinquish the dividends that have accrued to the shares that are traceable to the ill-gotten wealth of the Marcoses. After all, the dividends, either cash or stock, formed part of the resulting ownership of the Prime Holdings shares. The PCGG should run after the dividends and the garnishment proceedings offer an enviable option. 

E-mail: hugagni@yahoo.com

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The government’s predilection to shoot itself in the foot is now beginning to unravel with the expropriation route it had taken on the Naia-3 Terminal project.