Go Green with Vince Perez

I spent part of my birthday last May 26 attending the historic annual shareholders meeting of Manila Electric Company. I was ushered to the front row of the jam-packed Meralco theater. Every row, every seat, every space on the aisles, was occupied. Everyone there wanted to be a witness to corporate history being unfolded.

The Lopez clan had recently sold a 20% stake to PLDT’s Retirement Fund, which further increased its ownership to a reported 30.2% stake. Along with the Lopez group which retained a remaining 13.4% stake, PLDT controls 43% of Meralco. The divestment was a defensive move on the part of the Lopez group after San Miguel Corporation last year acquired a direct 27% stake from GSIS.  Along with its allies it claims to hold a combined 43% stake.

A brand new slate of 11 directors was elected unanimously in an atmosphere of conviviality, with 6 directors nominated by an alliance of PLDT and the Lopez Group led by Manny Pangilinan. Manolo Lopez retained his seat as chairman with Ping de Jesus as president. Five directors were nominated by San Miguel, led by Ramon Ang including my former Wharton colleague and TransCo President Alan Ortiz. Several old-timers on the board stepped down. Chito Francisco retired as president, while Cesar Virata was smiling and appeared relieved to retire as independent director. On the other hand, Chris Monsod had a dour, lugubrious expression on his face when his name was acknowledged as a retiring director.

Though the Lopez group made a big deal of the fact that Manolo Lopez remained as chairman and CEO, the reality is that Ramon Ang became vice-chairman while Manny Pangilinan assumes a unique new position as Execom chair.

This ownership reshuffle was made possible six years ago when I was invited in 2003 as then Energy Secretary by the Senate Franchise Committee as a resource person during its hearing on the renewal of the Meralco franchise. While I supported the extension of Meralco’s franchise, I argued that the by-laws of Meralco should remove a little-known provision dating back to 1986 which disallowed any shareholder from owning more than 10% of Meralco except for Benpres, the Lopez holdings firm. We all know that the deregulation of the telecoms, banking, and water utilities only came about from change in ownership in dominant companies like PLDT, PCI-Equitable, and MWSS. Soon after the franchise of Meralco was renewed in 2003, Meralco removed the 10% ownership restriction and declassified its Class A and B shares into one type of share.

The rest is history.