Transnational and publicly listed firm International Container Terminal Services Inc. (ICTSI), whose owner and poster boy Enrique K. Razon Jr. is among Forbes top billionaires, now finds itself in a legal bind.
The case stems from an estafa complaint, with Case Number XV-07-INV-16G-03550, filed by its minority shareholder Makiling Farms Inc. (Makiling) before the City Prosecutor’s Office of Manila. Makiling claims that it has been short-changed, alleging that its 5-percent stake in ICTSI was illegally transferred in favor of Razon’s late father Enrique Razon Sr. in 2004. Makiling shares, valued at P78.60 each at today’s ICTSI’s price, amount to more than P200 million.
Makiling is a stockholder of E. Razon Inc. (ERI), which won the management contract to operate the Port of Manila. Proof of its status as a shareholder is the original ERI stock certificates that Makiling claims have never been “assigned, encumbered or canceled.” While ERI has long been dissolved, Makiling claims, its corporate assets were never liquidated by the respondent.
In December 1987 a company known as ICTSI was formed. ERI subscribed to 28,049,600 shares (47 percent) out of the original 60 million shares, which comprised the total stockholdings of ICTSI. The new company eventually took over the operations of the Port of Manila. In the said complaint, Makiling says it is only after the 7.7 million ICTSI shares in the name of ERI, “which were admittedly acquired using ERI’s corporate funds.”
Makiling alleged that in 2004 its shares were illegally assigned in favor of Razon Sr. by the younger Razon, making it appear that his late father entered into an agreement with the Presidential Commission on Good Government (PCGG) in behalf of ERI for the lifting of ERI’s sequestration; and the dismissal by Sandiganbayan of the case against ERI. Razon Sr. also had agreed to pay P9 million, “in consideration of the dismissal of the case by the Sandiganbayan.”
It will be recalled that Imelda Marcos’s brother, Alfredo “Bejo” Romualdez, was reported to have forcibly taken over some of ERI’s shares, which had become the basis for the company’s sequestration when Corazon C. Aquino took over the presidency from Ferdinand Marcos Sr. Marcos Sr. was booted out of power through the peaceful People Power revolt in 1986.
Soon after, the 7.7 million ICSTI shares in the name of ERI were assigned to Razon Sr., ostensibly to reimburse him for the P9 million he paid to the PCGG.
Upon discovery of the shares’ transfer in October 2004, Makiling demanded from Razon Jr. substantiation that the shares’ transfer was for a valuable consideration. When the ICTSI chairman asked Makiling for proof of ownership, since most of the company’s records “were lost or destroyed,” Makiling complied.
In the course of its own investigation, the company learned that the ERI sequestration has not been lifted, providing it with a “smoking gun” against ICTSI.
Makiling was able to obtain a certification from Sandiganbayan that ERI has not complied with the condition for the lifting of the sequestration, to wit:
“This certifies that (1) the Sandiganbayan, Fourth Division, where the above-entitled case was previously pending, have not issued any order/resolution lifting the sequestration issued against E. Razon Inc. (Metro Port Services Inc.); and (2) there is no motion filed or agreement on record between E. Razon Inc. (Metro Port Services Inc.) and the Presidential Commission on Good Government (PCGG) which led to the lifting of the sequestration issued against the corporation.”
Makiling provided Razon Jr. with a copy of this certification, and challenged him that “if he could produce documents that the Deed of Assignment was supported by a valid consideration, i.e., present a certified true copy of the alleged agreement entered into by ERI with the PCGG, as well as proof of payment by his father, Enrique Razon, of P9,000,000 to the PCGG, Makiling would withdraw its claim covering its proportionate ownership of the 7.7 million ICTSI shares.”
Razon Jr., however, has not been able to produce a copy of the said agreement with the PCGG “… wherein the PCGG acknowledged full payment of the amount of P9 million supposedly made by his father.…”
In summary, the Sandiganbayan certification rebutted the claim of Razon Jr. in the Deed of Assignment that ERI allegedly had to reimburse his father, through the assignment of 7.7 million ICTSI shares, “because he allegedly caused the lifting of the sequestration and dismissal by the Sandiganbayan of the case against ERI.”
To be continued
For comments and suggestions, e-mail me at mvala.v@gmail.com