MANILA, 8 December 2007 — Tycoon Lucio Tan yesterday won a key Supreme Court ruling in a 21-year battle with the Philippine government for control of part of his business empire, court officials said.
The country’s highest court ruled that the sequestration of disputed shares in four Tan companies — including Allied Banking Corp., and Fortune Tobacco and Shareholdings Inc. — was unlawful because the government did not have any proof that Tan had acquired the assets illegally.
The government sequestered the shares of Fortune and Allied Bank along with those of Tan firms Foremost Farms Inc. and Maranao Hotels and Resort Corp. in 1986, after a bloodless popular revolt sent his friend, the late president Ferdinand Marcos, into US exile.
The seizure of the assets was part of the new government’s efforts to restore to the state some $10 billion worth of state funds allegedly embezzled by Marcos, some of which which he supposedly farmed out to business cronies who served as fronts.
The total value of the sequestered shares are not known.
Tan, the third-richest man in the Philippines, also controls the flagship carrier Philippine Airlines, Asia Brewery and Philippine National Bank, which he wants to merge with Allied Bank.
The Supreme Court ruled there was no evidence that the shareholders had acquired the stocks by “taking undue advantage of their connections or relationship with former President Marcos or his family, relatives and close associates.”
“Without any reason in the sequestration order why respondents’ shares of stock were being sequestered, it would be impossible to determine whether the order of sequestration was issued with any prima facie factual foundation,” the ruling added.
The Presidential Commission on Good Government (PCGG), a state agency working to recover the alleged ill-gotten wealth of Marcos and his cronies, plans to appeal the ruling.
“This is just a temporary setback. But bear in mind that the issue of ownership is still pending before the courts,” said J. Ermin Ernest Miguel, a lawyer for the government commission.
“What was affirmed by the Supreme Court is only the lifting of the sequestration order. A sequestration order is only a provisional remedy,” Miguel added.
Last month the former head of the PCGG told a court that Tan had offered 500 million pesos ($12 million) to settle cases against him in 1986.
Tan lawyer Estelito Mendoza praised the Supreme Court ruling as a vindication of his client.
“It has been 21 long years since the writs of sequestration have been issued. It proves all along our main contention that there is no prima facie basis that the shares constitute ill-gotten wealth,” he said in a statement.
The 73-year-old Tan was born in China’s Fujian province and moved to the Philippines as a child.
Former first lady Imelda Marcos, widow of the former dictator, had previously described Tan in media interviews as a mere magbobote (one whose in the business of collecting empty bottles) when he started his business, but managed to build an empire because of his close ties with the Marcos government.
Marcos’ son Ferdinand “Bongbong” Jr., currently a member of the House of Representatives, had also promised to testify in one of the government’s sequestration cases against Tan to show that the tycoon’s assets were actually owned by the late president.
Low Profile
Tan, who keeps a low profile, shunning interviews and preferring to traverse Manila by helicopter, has repeatedly denied he was a crony of Marcos and that he acquired control of several firms at preferential prices.
The PCGG has recovered only $1.98 billion of the nearly $10 billion worth of property, stocks, art and jewels allegedly stolen by Marcos and his associates in over 20 years of rule.
In a recent survey, local business people said the PCGG was only half-heartedly fighting corruption.
“We are celebrating our 21st anniversary (since Marcos) and virtually nothing has been achieved,” said Peter Wallace, president of consultancy firm The Wallace Business Forum and a resident of Manila for 32 years.
“There was no question that Marcos and his cronies sequestered many companies, took control of them; that was common knowledge at the time. It was blatantly done and yet none of it has been given back to its rightful owners or the government.”
“It’s a disgraceful exhibition of lack of justice,” he said. (With reports from Reuters & AFP)
