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AS
promised, the protagonists in the much-anticipated
boardroom battle at the Manila Electric Co. (Meralco)
annual stockholders’ meeting last week did their level
best to outmaneuver each other for control of the
country’s biggest power-distribution company.
Like
most corporate battles where the stakes are high and
long-lasting, this one carried with it the kind of
battle scars which will impact heavily on the company’s
performance and standing in the years to come. Up to the
very last minute before the meeting was called on
Tuesday, both groups kept their operations close to
their chests.
On the
one hand, the Lopezes who are managing Meralco stood
their ground disregarding calls for the joint vetting of
the proxy votes called for by their archcritic,
Government Service Insurance System (GSIS) president and
Meralco director Winston Garcia, and proceeded to
undertake the validation without him.
In turn,
the latter went to town complaining about the
irregularity of the entire validation process and sought
legal cover to declare the same as invalid, if not
bogus. He got help from Securities and Exchange
Commission (SEC) officer in charge Jess Martinez, who
issued a cease-and-desist order (CDO) on Meralco
management to set aside the challenged proxies just in
time for the stockholders’ meeting.
Of
course, the Lopez group ignored the order, citing a
number of deficiencies, i.e., the same was undated and
had no docket number, carried only one signature and had
no official seal on the document, among others, and
proceeded to vote the proxies to elect five of the nine
directors.
Garcia
claimed that his group would have been in the majority
had the challenged proxies been set aside or, after due
hearing, for the said matter to have been validly heard
by the SEC, it being a corporate-governance and not an
intracorporate dispute cognizable by the regular courts,
as claimed by the Lopezes.
By day’s
end, after the Lopezes declared themselves the majority
in the board and faced with a “show-cause order” from
the SEC for defying the CDO, they elevated the case to
the Court of Appeals (CA), which granted a 60-day
temporary restraining order. They must have reckoned
that with the courts stepping into the picture, this
whole affair will simply blow over and they will be left
to their old ways.
Well,
the maneuverings on both sides, legal or otherwise, are
par for avid corporate practitioners and will probably
be the stuff of dinner conversations and analysis for
months on end.
But
Meralco is a public utility servicing the country’s
nerve center, as it were, and using more than 60 percent
of its generated power guarantees that this issue will
not fade into the sidelines anytime soon. In fact, the
reverse may be true—the company being at the heart of
the country’s lifeline, its fate, if not its every move,
will decidedly be the continuing object of public
scrutiny and concern.
Which is
why the public cannot help but ask: In the end, will all
these maneuverings lead to reduced electric rates, or
will it just serve to muddle the waters, let the
unabated increases go on and the guilty parties get away
with murder?
If you
ask Garcia, he will pursue his cause now interlinked
with the public call for reduced power rates to the very
end. The public and his 1.4 million GSIS members
certainly hope so, having brought to public attention a
number of practices in Meralco and even at the ERC,
including provisions of the Electric Power Industry
Reform Act (Epira) requiring amendment.
On the
other hand, the Lopezes themselves, together with their
brethren within the conglomerate doing business with
Meralco, have vowed not only to explain the benefits of
their close, some say incestuous, relationships but
their own suggestions on how to reduce the rates.
Indeed,
if there is any benefit to the public of this drawn-out
debate on the power industry, it is the fact that
finally we get an inside view of the heretofore
mysterious practices embedded in the country’s power
sector from the governing laws (Epira, Magna Carta for
Residential Electricity and Open Access Rules, etc.), to
the cozy relationships between and among the power
generators (National Power Corp. and the IPPs) and their
suppliers (ShellGas, coal and oil), to the power
distributors (Meralco, Visayan Electric, electric coops)
to the transmitters (Transco, WESM, etc.), the big
consumers (1MW or more), the regulator (ERC) and
development and support agencies (DOE and NEA).
It is
the interplay of these facets of the industry which
needs to be reviewed in their entirety if we are to get
to the bottom of the unabated increase in rates. The
corporate brawl may be good copy (although the Meralco
management does not think so as it rejected requests for
media coverage of the stockholders’ meeting, live or
delayed), but it is just a sideshow.
In the
end, as Garcia himself admitted, dislodging the Manolo
Lopez group (what’s the guy’s take on this Lopez,
anyway?) was just a necessary step to reducing Meralco’s
and, possibly, the other distributors’, rates
nationwide.
It will
take more than management change and not just at Meralco
to do that. The public know that, as well. So, let the
review and winnowing process for reduced electric rates
begin. The sooner, the better.
IFC is
wrong on
Lapu-Lapu
City
IFC is,
of course, the International Finance Corp., the
investment arm of the World Bank. It has been in the
news lately for a number of corporate raids, if we may
call it such, in some Asian and African countries.
In the
Philippines, it has been an active advocate of
transparency in corporate governance and for proper and
responsible competitiveness. For all its talk and its
work in these areas, the IFC of late has faltered, and
faltered gravely, in naming Lapu-Lapu City as one of the
most competitive cities in the country along with Taguig
and Marikina.
That is
farthest from the truth if you ask the local business
community in that city or even in the entire
Cebu province
where Lapu-lapu is located. As a matter of fact, it is
possibly the most corrupt if we go by the reports of
shenanigans coming out of that area.
Apart
from the fact that its mayor, a certain Arturo Radaza,
has just been charged by the Ombudsman with graft and
corruption in connection with the overpriced lampposts
procured for the Asean Summit two years ago. Radaza’s
office has also been faulted for the near pullout of a
big-time IT/animation company, Big Foot and the Korean
owners of a 500-room hotel which had to stop
construction after being asked for a multimillion-peso
bribe for the issuance of a permit.
Another
big businessman, a certain Adlawan, vowed not to
continue with his multimillion-peso restaurant complex
in the city until Radaza is out of City Hall after he
was also advised to shell out bribe money for permits.
These
are verifiable horror stories which the IFC and its
investigators or their subcontractors for the
competitiveness index may have overlooked, and how!
In any
event, what may have impressed the IFC is the manner by
which the Mactan Export Processing Zone is being run. We
are told that the close to 400 establishments within the
zone, which is located in Lapu-Lapu City, have nothing
but praises for the responsible and professional
handling of the zone’s affairs.
But
Radaza or his administration has nothing to do with that
since the zone has its own rules and practices and
hardly interacts with City Hall, save when cases of
harassment by those identified with the Radaza
administration are brought to its attention.
Such
being the case, the IFC better review its records and
make the necessary corrections before it is too late.
E-mail: emman_delacruz@yahoo.com. |
