Doesn't the SEC act in Meralco remind you of the Comelec?

AS I WRECK THIS CHAIR By William M. Esposo
Thursday, May 29, 2008

A few days before the May 27 Meralco Annual Stockholders Meeting, Winston Garcia, GSIS General Manager representing a quarter of Meralco stockholders, conceded that he will not be able to muster the needed proxy votes to takeover management from the Lopezes.

That comes as no surprise at all. The last thing stockholders would like to see is the government running the power firm. The fastest way to erode share value and lose money is to let the government run the enterprise. That concern must have also prodded stockholders to attend the May 27 meeting in bigger than usual numbers.

Then, Winston Garcia suddenly pulls this monkey wrench and announces before the fateful Meralco meeting that the Lopezes will retain Meralco management through the use of bogus proxy votes.

Now, as if on cue, lo and behold, the SEC (Securities and Exchange Commission) shows up at the Meralco Annual Stockholders Meeting last Tuesday to impose a cease and desist order that will stop the election of board members.

It would appear that Garcia maneuvered the SEC order that will allow him to disregard the disputed Lopez votes — thus paving the way for his desired management takeover.

Having chaired several corporations, I am familiar with these maneuvers that one is to expect in the executive suite. The bigger the corporation, the more creative and vicious the maneuvering and back stabbing are. Greed and stiletto back planting go together like ketchup and fries.

Frankly, I have not seen anything as scandalous and downright high-handed as that SEC cease and desist order to halt the Meralco board elections. Government is supposed to be a regulator, an arbiter if need be. But this reeks of outright partiality. It's like playing the Los Angeles Lakers with Phil Jackson, Mitch Kupchak and Jerry Buss as the referees!

Monico Jacob of the Lopez Group lost no time spelling out the far reaching consequences of the SEC action on Philippine business and the inflow of foreign investments. Jacob was, of course, promoting Lopez interest in Meralco but that does not negate the truth of what he said about how the SEC act will make investors think thrice about doing business here.

Investors are the easiest to scare. Rumors, no matter how wild and unfounded, can scare them away. They can just as easily say that there is no point investing in a place where the rumors can give us a heart attack. They scamper at the earliest signs of disorder. And the warning that this hostile takeover of the Meralco sends will scare even the bravest and most daring corporate gamesman.

It is bad enough that investors here complain about how we just as easily change the rules of the game, how a Supreme Court decision can alter the business landscape overnight. This SEC order says it loud and clear: "If your business is lucrative enough, the GMA regime reserves the right to takeover."

The scandalous SEC order does not surprise us when taken in the context of what has been happening to our country ever since Madame Gloria Macapagal Arroyo (GMA) ascended the presidency. It comes as a natural sequence to the long trail of acts of impunity that have characterized the Arroyo regime.

The Lopez board defended its defiance to the SEC order by stating that it was highly irregular and defective. They enumerated the following irregularities:

1. That it did not even have a date (How is one to know when this order applies?),

2. That it was signed by only one SEC Commissioner,

3. That it was not the result of a Commission meeting (So who decided to issue it and for what justifications?),

4. That there was no docket number (Is this document a joke or for real?),

5. That there was no SEC official seal on the document, among other issues.

It was my former Ateneo classmate Jess Martinez who signed the questioned SEC cease and desist order. When I told Jess how I felt about the SEC intervention, he deplored what he considered my "prejudging" his order.

When I got back to him about the points raised (no date, only one signature, etc), Jess said that these were just the arguments of the Meralco lawyers playing to the gallery. Jess claimed that: "We've issued CDOs (cease and desist orders) by the dozens without bothering with those petty details."

"It doesn't affect the order at all. That's the way it is buddy," He added.

It does not help Jess at all that he happens to be a province mate of Winston Garcia — something that connects dots in the highly politicized Philippine landscape. I would not hold that though against Jess.

But for SEC Commissioner Jess Martinez to say that a missing date on a cease and desist order and those other mentioned details are inconsequential — now that is what I call bovine ordure. Even Raul Gonzalez and his brand of justice might find it difficult to sustain that SEC cease and desist order with all those missing elements.