UCAP wants SC order on dividends from SMC shares

The United Coconut Associations of the Philippines Inc. (UCAP) appealed to the Supreme Court (SC) to hasten the release of cash dividends from shares of San Miguel Corp. to the CIIF-Oil Mills Group. The association said the money would help "initialize programs and projects for the coconut sector." In a resolution approved by its board, UCAP asked the SC to immediately deliberate on a pending petition by the Office of the Solicitor General (OSG) to allow the continued remittance of San Miguel dividends to the CIIF-Oil Mills Group. The funds will be used – as provided under Presidential Decrees 961 and 1468 – for coconut planting and replanting programs, soil fertilization, inter-cropping projects, procurement of insurance, and payment of claims of coconut farmers. "Increased production of copra will clearly enable the country to remain as the world's number one exporter of coconut oil and other by-products to benefit not only our coconut farmers but also millers, refiners and producers. The government should see to it that our coconut farmers are adequately covered by appropriate insurance as well as fund claims on such insurance," UCAP said in a statement. The association urged the government to take "immediate and concrete steps to assure the continued utilization of the cash dividends." UCAP members include the Association of Coconut Brokers Inc., Association of Philippine Coconut Desiccators Coconut Oil Refiners Association, Philippine Coconut Authority, Philippine Coconut Oil Producers Association, Philippine Coconut Producers Federation, Philippine Coconut Research & Development Foundation, Philippine Oleochemical Mfg. Association, United Coconut Planters Bank, and Virgin Coconut Oil Producers & Traders Assn. of the Philippines. Before the conversion of CIIF-Oil Mills Group's 753,848,312 shares from common to preferred stocks in October, San Miguel had been remitting about P1 billion in annual dividends to the CIIF-Oil Mills Group. Common stocks gave owners inherent voting powers, while holders of preferred stocks have guaranteed priority over dividends but not voting rights. Majority of UCAP members agreed to covert the shares because it increased the guaranteed dividends to 8 percent a year or about P4.4 billion remitted in quarterly tranches. Under the terms of conversion, San Miguel has the option to buy back the preferred shares under the name of CIIF-Oil Mills Group within three years at the redemption value of P75 per share or about P56.5 billion. Should San Miguel decide redeem the shares, the money would be put in escrow as the ownership of the shares held by the CIIF-Oil Mills Group is still being heard by the court. The SC also ordered that the quarterly dividends be deposited in the escrow account. Since October, San Miguel has remitted P3.1 billion in cash dividends to the escrow account. On June 18, the OSG filed a motion for status quo order so that the San Miguel dividends can be used the way the dividends were used before the shares were converted into preferred stocks. —JE, GMANews.TV