SUPREME COURT ORDERS RETURN OF PLDT SHARES TO GOVT.

January 21, 2006

SC orders return of PLDT shares to gov’t
Sat Jan 21,2006
FROM MANILA BULLETIN

The Supreme Court yesterday ordered the return to the government, as ill-gotten wealth of the late former President Ferdinand Marcos, of the 111,415 shares of stocks in the Philippine Long Distance Telephone Co. (PLDT) consisting of shares of the Philippine Telecommunications Investment Corp. (PTIC) registered in the name of Prime Holdings, Inc. (PHI).

In a decision written by Justice Conchita Carpio Morales, the High Court granted the petition of the government, through the Presidential Commission on Good Government (PCGG), “to the extent that it prays for the reconveyance to the Republic of 111,415 PTIC shares registered in the name of PHI.”

It said “on the basis of the evidence, therefore, President Marcos owned PHI and all the incorporators thereof acted under his direction.”

The 111,415 shares were claimed by the government from the estate of the late businessman Ramon U. Cojuangco and his wife, Imelda O. Cojuangco, PHI, and Mrs. Imelda R. Marcos.

At the time the PCGG filed a civil case for reconveyance against the Marcoses and his so-called cronies with the Sandiganbayan in 1987, PTIC controlled 28 percent of the outstanding shares in PLDT.

It was not stated in the 35-page decision whether the PLDT shares ordered returned to the government were the same shares sold in 1996 by the Cojuangcos to Manuel Pangilinan for a reported 0 million.

Chief Justice Artemio V. Panganiban and Justice Reynato S. Puno, Leonardo A. Quisumbing, Ma. Alicia Austria Martinez, Renato C. Corona, and Romeo J. Callejo Sr. concurred in the decision. Puno and Quisumbing concurred merely in the result.

Those who dissented were Justices Cancio C. Garcia, who drafted the decision which was used by the court as basis for deliberation but whose draft was outvoted by the majority members of the court, Angelina Sandoval Gutierrez who wrote a separate dissenting opinion, Consuelo Ynares Santiago, and Minita Chico Nazario, who both joined Garcia in his opinion.

Justices Antonio T. Carpio, Adolfo S. Azcuna, and Dante O. Tinga inhibited themselves.

Resolved by the High Court were five consolidated cases involving the PHI shares held by the estate of Cojuangco. The cases arose from the PCGG’s civil case filed with the Sandiganbayan and from the ruling handed down by the anti-graft court in 2002.

Four cases were dismissed by the Supreme Court for lack of merit. The fifth case, that which was filed by the PCGG, was resolved in favor of the government.

Sought for recovery by the PCGG as alleged ill- gotten wealth of Marcos were PTIC shares consisting of 76,779 shares in the name of Ramon Cojuangco; 21,525 in the name of his wife, Imelda; and 111,415 in the name of PHI. In 1987, PTIC was registered as the biggest stockholder of PLDT.

On May 6, 2002, the Sandiganbayan dismissed the PCGG case for lack of merit and granted the motion for summary judgment sought by Mrs. Cojuangco.

When its motion for reconsideration was denied, the PCGG elevated the case to the Supreme Court. Alfonso T. Yuchengco and Y Realty Corp. filed their petition for intervention.

Three of the five cases had been pending with the High Court even before the issuance by the Sandiganbayan of its partial decision on May 6, 2002.

Narrating the background of PHI, the High Court said the company was incorporated on Oct. 5, 1977 with Jose Campos Jr. (son of Jose Yao Campos), Rolando Gapud, Renato Lirio, Ernesto Abalos, and Gervacio Gaviola as incorporators.

It said in 1977, the corporation elected Gapud as president. On Dec. 20, 1977, a total of 54,349 PTIC shares were registered in the name of Cojuangco. On Jan. 27, 1978, Cojuangco and Luis Tirso Rivilla signed an agreement with Gapud to sell the PTIC shares to PHI and on April 20, 1978, a total of 111,415 common shares of PTIC representing 46.12 percent of the outstanding shares of PTIC were transferred to PHI.

The High Court noted several changes in the composition of the board of PHI and several transfers of shares of stocks owned by the stockholders.

It said the Cojuangcos, Mrs. Marcos, and the PHI agreed with the PCGG that the PHI has undisclosed owners “but their only disagreement being who this owner is.”

It also said that both the Cojuangcos and PHI proffered that the real owners were the Cojuangcos, but the PCGG said it was the Marcoses.

The High Court pointed out that “the Sandiganbayan, therefore, was not to look for proof beyond reasonable doubt, but to determine, based on the evidence presented, in light of common human experience, which of the theories proffered by the parties is more worthy of credence.”

“The evidence presented by the parties shows that the preponderance clearly lies with the Republic, but the Sandiganbayan grossly misappreciated it, and, therefore, committed a reversible error,” it said.

It said it is not disputed that “Jose Yao Campos is a former Marcos crony who, after the February 1986 EDSA revolution, surrendered to the government substantial assets which he confessed to have held in behalf of Marcos.”

According to the High Court, “after Campos organized PHI for the Marcoses, he entrusted most if not all of its business transactions to his close associated Gapud, the president of PHI who himself confessed to have acted as a Marcos nominee.”

“The credibility of Campos’ testimony stands, and his sworn admission that PHI was a dummy corporation organized by former President Marcos constitutes convincing evidence that PHI was beneficially owned by Marcos,” it said.

It pointed out that Gapud, one of PHI incorporators, affirmed Campos’ sworn statement in his own deposition which “substantially corroborates the statements of Campos and further establishes that PHI was a dummy corporation of the Marcoses.”

It also said the testimonies of Campos and Gapud were also corroborated by lawyer de Guzman who used to be the counsel of United Laboratories controlled by the Camposes.

“The statements of De Guzman clearly support the thesis of the Republic that PHI is a dummy of the Marcoses, it having been completely organized by the associates of Campos, who had categorically testified to having organized PHI for the benefit of President Marcos,” the High Court said.

“On the other hand, there is hardly any evidence on Cojuangco’s role in the organization of PHI to substantiate the thesis that the same was beneficially owned by him,” it said.

“Clearly, the Republic’s thesis that President Marcos is the beneficial owner of PHI is deduced from established facts which, weighed by common experience, engender the inference as a very strong probability. Only a Marcos ownership can make sense of the circumstances surrounding the origins of PHI,” it pointed out.

In another case, the High Court said the rule of Marcos was described as a “well-entrenched plundering regime of 20 years” and noted the “magnitude of the regime’s organized pillage and the ingenuity of the plunderers and pillagers with the assistance of the experts and best legal minds available in the market.”

It added that the “evidence presented in this case reveals one more instance of this grand scheme. This court – guardian of the high standards and noble traditions of the legal profession – has thus before it an opportunity to undo, even if only to a certain extent, the damage that has been done.”