Part one
The Manila Prosecutors Office is now in the thick of ferreting out the truth behind the claim of Makiling Farms Inc. (MFI) that its 5-percent holdings in E. Razon Inc. (ERI) was illegally transferred to the International Container Terminal Services Inc. (ICTSI) to the detriment of MFI.
ERI was the former corporate name of ICTSI.
Documents obtained by BusinessWise reveal new evidence presented by MFI to bolster its claim; and it now claims collusion between ICTSI and the Presidential Commission on Good Government (PCGG) to deny it of its rightful claim.
Also in an e-mail sent to BusinessWise, MFI’s Francis de Borja said his company has obtained a copy of the agreement between the PCGG and Enrique Razon Sr.:
“This agreement, which Razon Jr. had steadfastly refused to produce, was used by the Razons to justify the transfer,” and that “the agreement was never notarized nor submitted, as provided for by law, to the Sandigayan for approval.” De Borja furnished BusinessWise with the document.
He said that, at worst, the document proves that “Mr. Razon Jr. acquired control of ICTSI fraudulently in collusion with the PCGG. They document how corrupt previous PCGG managements [were] as demonstrated by their actions and, yes, inaction, depending on what course was beneficial to the Razons and the PCGG managements over the years.”
To refresh, the PCGG in 1986 or about six weeks after the Edsa revolution, sequestered ERI and its assets. The PCGG claimed that the ERI “was a crony-company [of the late] Ferdinand E. Marcos. In July 1987 the PCGG filed an ongoing case [#0010] in the Sandiganbayan against 49 individuals, including Enrique Razon Sr., in his personal capacity, with a claim of P51 billion for the recovery of ill-gotten wealth.”
ERI was majority-owned by the family of Enrique Razon Jr. while MFI was ERI’s minority shareholder owning 5 percent of the company (basis of dilution from original 10-percent shareholding still under investigation by MFI). MFI is a small, family-owned company whose patriarch was involved with ERI from 1964.
Between1965 and1988 ERI was the government-franchised original arrastre operator of Manila South Harbor. On December 24, 1987, ICTSI was incorporated with ERI as controlling shareholder with 28,049,600 out of 60,000,000 (47.5-percent) shares. In early 1988, the government bid out the arrastre contract as the Manila International Container Terminal (MICT). In May 1988 ICTSI won the contract for MICT in lieu of ERI, which did not participate in the bidding and, therefore, ceased its business activity of arrastre operations from the mid-1960s. In 1989 and 1990 shortly after all the ERI shares in ICTSI were transferred to Enrique Razon Jr., Enrique Razon Sr. and two Razon-controlled companies. MFI claims that “clearly, only the Razon family benefited from the ICTSI success story and the minority was left with a shell company.”
On March 28, 2000, the Security Exchange Commission revoked the Certificate of Registration of ERI for failure to submit mandatory financial reports and General Information Sheets over a number of years. Strangely enough, ERI did not appear in the proceeding nor contest ERI’s closure.
Up to September 2016, 16 years later, ERI has not been liquidated and its assets distributed to its shareholders, including MFI.
In March 2016, or 12 years “of protracted, but fruitless, negotiations between Razon Jr. and his representatives,” MFI wrote Razon a final demand letter with a threat to file the Estafa suit. Razon Jr.’s representatives then offered a settlement of P10 million, which MFI declined. On July 17, 2016, Makiling filed a criminal complaint of Estafa against Enrique Razon Jr. with the City Prosecutor of Manila.
All the 50,038,674 ICTSI shares (now 418,872,928 after stock dividends with market value of P33.5 billion at P80 per share) owned by ERI, where Makiling is a stockholder, were transferred to Razon-related interests. (All four deeds were signed by Razon Jr. and Razon Sr. representing the assignee and/or the assignor. The transfers were made without any cash payments and offset against alleged existing advances or alleged future advances).
To be continued
For comments and suggestions, e-mail me at mvala.v@gmail.com