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MANILA. Government
pension fund chief Winston Garcia yesterday described as illegal the decision
of the Manila Electric Co. (Meralco) management to include management-validated
proxies in the election of a new Meralco board.
In
a press conference at the Crowne Plaza Hotel after attending the stockholders'
meeting, Garcia said Meralco management's decision to defy a Securities and Exchange
Commission (SEC) order to disqualify the management-validated proxies in the Meralco
annual stockholders' meeting "smacked of arrogance and desperation."
"This
morning, the whole world saw the arrogance of management, the naked display of
arrogance of management when they openly defied the order of the SEC. This just
goes to show that Meralco management headed by Manolo Lopez will do everything
in their power, including defying laws just so they can continue to do their philandering
ways in Meralco," he told reporters.
Garcia
said that instead of defying the SEC order, the Meralco management should have
questioned the injunction before the Court of Appeals or even the Supreme Court.
"That is what they should have done in the first place. I challenge them
-- if they are really surefooted in their stance, they should go to the Court
of appeals or the Supreme Court in order to question this order. This is how we
question orders of regulatory agencies."
Garcia,
who is president of the Government Service Insurance System (GSIS), said Meralco
management, particularly independent Meralco assistant corporate secretary Anthony
Rosete, and independent audit firm Sycip, Gorres and Velayo risk being cited for
contempt for defying the SEC order and canvassing proxy votes that were declared
invalid and illegal.
He
added that SEC can do its own tally if SGV defies the order.
Before
the stockholders meeting, the SEC served an injunction order preventing proxies
of Meralco from being voted on the board. The injunction order, signed by commission
officer-in-charge Jesus Enrique Martinez, also allowed SEC to take over the stockholders'
meeting proceedings.
Rosete,
however, declared the SEC order as "null and void" since it had no packet
number, no date, no official seal of SEC and was signed by only one commissioner.
He added that the SEC's Enforcement and Compliance Division did not give Meralco
a chance to refute the charges of Garcia and that the GSIS chief has already filed
a similar case with the Pasay regional trial court.
Garcia,
however, said he is confident that Martinez's order will be upheld in court. He
said he participated in the voting for the new Meralco management since government
institutions including GSIS still have a controlling stake in Meralco minus the
proxies.
"The
meeting itself was not illegal. The conduct of elections, where they defied the
SEC order, is illegal. They did not even convene an independent validation committee
to validate proxies," he said.
He
also decried the lack of transparency in the identification of proxies, which
he said was a violation of SEC rules and regulations.
He
said he is confident that government will wrest control of Meralco from the Lopezes
once the illegal proxies are removed from the final count of the Meralco board
elections.
"Today
is the beginning of the end of Mr. Manolo Lopez. I see the light at the end of
the tunnel. Truth and justice is on our side. The liberation of Metro Manila residents
who have long been oppressed by Meralco's oppressive power rates will now come,"
he said.
DE-MONOPOLIZATION
Garcia
said that he voted for five government representatives in the Meralco board including
himself, former GSIS chief Bernardino Abes, STI College owner Eusebio Tanco and
lawyers Daisy Arce and Jeremy Parulan.
He
said that once a new board is in place, Meralco will be able to reduce power rates
by reducing the percentage of power procured by Meralco from Lopez-owned power
producers. He said that instead of sourcing 55 percent of power from Lopez-owned
IPPs, Meralco will get 65 percent of power from the state-owned National Power
Corporation and the rest from IPPs.
He
said the new management will also streamline the Meralco bureaucracy through layoffs
and the hiring of more experienced and competent managers who can take over the
power distributor. He said Meralco employees already number to more than 12,000
including managers and contractual workers.
Asked
if he is considering sitting as Meralco chairman, Garcia said that decision would
be decided by the majority of the board. He added that he is also the chairman
of the publicly-listed National Reinsurance Corporation of the Philippines.
"Whether
this is a disqualification, I do not know yet. I don't think it is," he said.
Garcia denied that government moves to take over Meralco is going against
state policy to privatize its assets.
He
said the takeover of Meralco is a form of "de-monopolization" and likened
it to the sale of portions of the Philippine Long Distance Telephone (PLDT) company
franchise.
"Remember
before in PLDT, it would take two to three years before getting a phone line because
they had a monopoly. Monopoly is worse than government management. We
are suffering because Meralco charges higher power rates than the rest of the
country," he said.
He
said Meralco management is also guilty of violating the Electric Power Industry
Reform Act for failing to buy the cheapest power available but instead sources
it from Lopez-owned IPPs. | 
