Philippine Daily Inquirer
Wednesday, December 9, 1998
(Fifth of a series)
By Christine Herrera
"THE PRESIDENT (Marcos) gave me money so I can invest in (Lucio) Tan's companies and make them big to employ many people," Imelda Marcos told the INQUIRER.
Among the biggest companies held by Tan for Marcos, according to the former first lady, were Fortune Tobacco Corp., Allied Banking Corp., Asia Brewery Inc., Foremost Farms Inc. and the flagship company, Shareholdings Inc.
According to Ms. Marcos, all the shares of stocks (up to 60 to 100 percent) held by Tan were for Marcos.
Tan, whom she calls a "magbobote" (bottle peddler), gained substantial concessions in "specific taxes and stamp duties for his cigarette (Fortune Tobacco) and beer (Asia brewery) operations," she said.
"We gave Tan and the others all-out support," she said.
Documents furnished the Inquirer showed that Tan was given by Marcos discounts on the interest on the loans granted Tan.
Ms. Marcos said the money generated by Marcos’ companies was also used by Tan to acquire majority equity in Philippine Airlines. She said she would also reclaim PAL ownership.
"Now, Tan acquired PAL using our money," she said. "I will have to take PAL, too, especially after what he did to some 8,000 workers."
Told that Tan was negotiating with other foreign airlines that could infuse fresh capital into PAL, Ms. Marcos said: "Well, those firms will just inherit a headache because we will also run after them.”
Ms. Marcos said she met Tan through her cousin, Herminio Disini. Both were then partners in Philippine Tobacco and Filters Corp.
She explained that Tan was a "small-time" businessman before he became a member of Marcos' inner circle. She said Tan was into bottling and filter manufacturing, but that these were just small businesses.
Besides, she said, her husband needed contacts within the Chinese community so he decided to recruit Tan.
In an affidavit, Rolando Gapud said Marcos and Tan had an understanding that Marcos owned 60 percent of Shareholdings Inc., which owned Fortune Tobacco Corp., Asia Brewery Inc., Allied Banking Corp. and Foremost Farms Inc.
Gapud is suspected to be Marcos’ banker and bagman.
In his deposition submitted to the Presidential Commission on Good Government after the Marcoses were forced out of the country in 1986, Gapud confirmed this understanding by claiming that apart from the 60 percent equity of Marcos, Lucio Tan had been regularly paying through security Bank and Trust Co. P60 to P100 million to Marcos, in exchange for government privileges and concessions Marcos had been giving Tan’s businesses.
Preferential tax breaks
The concessions included preferential tax treatment for Asia Brewery’s beer products and Fortune’s cigarette products.
Incidentally, the Bureau of International Revenue later sued Tan and Fortune for allegedly evading payment of P26 billion worth of cigarette taxes. (Recently, however, the BIR said it was dropping charges against Tan due to weak evidence.)
In his affidavit, Gapud described Tan as a person who belonged to the group that could get Marcos to issue special presidential decrees and letters of instruction for their mutual benefit.
In 1985, Gapud said he was asked by Marcos to formalize the 60-percent equity sharing with Tan. This despite the fact that Marcos already had in his possession shares of stock to prove majority ownership of Tan’s firms.
Tan, according to Gapud, tried to bargain and tried to ask Marcos’ equity be reduced to only 50 percent.
“Tan insisted that he outwitted Mr. Marcos his 60-percent equity in fake certificates of stock,” he said. “This is not accurate.”
“Mr. Marcos and Mr. Tan were in partnership and they both derive great material benefits from their relationship,” Gapud said.
“As far as I know, Tan was not in a position to outwit or outmaneuver Mr. Marcos. I do not know of a crony-or-business associate who could have cheated Mr. Marcos,” he added.
But Mr. Marcos denied getting money from Tan. She said Marcos’ income from the Tan-managed firms had been left “untouched” to prepare for expansion and the acquisition of more companies.
The Cojuangcos
Ms. Marcos said that of all the cojuangcos, Ramon “Monching” Cojuangco was the closest to the Marcoses.
“Monching was closest to us because he appeared to be the most oppressed member of the Cojuangco family,” she said.
It was through Ramon that the Marcoses learned about Eduardo “Danding” Cojuangco’s problem in Bacnotan Cement Corp.
“Monching asked us to help him,” she said.
She said her husband did not only bail Danding out of his problems but also made him manage companies on behalf of the Marcoses.
According to Ms. Marcos, Ramon was recruited to the inner circle to act as a Marcos trustee in such companies such as Philippines Telecommunications Investment Corp. (PTIC), the controlling owner of Philippine Long Distance Telephone Co.
Upon the termination of parity rights in 1974, President Marcos gave Ramon the wherewithal to acquire the American-run telephone company.
Marcos also told him to choose his own men and tap them as trustees in behalf of Marcos.
She said the Marcoses owned all the shares held by Ramon in PTIC-PLDT. These shares were eventually transferred to his son, Antonio “Tony Boy” Cojuangco, upon the patriarch’s death in 1981.
PLDT’s majority owner
Ms. Marcos said her late husband owned 52.9 percent of PTIC - the 42 percent held by the Cojuangco-Ongsiako families, the 7.8 percent held by Alfonso Yuchengco and the 3.1 percent of Antonio Meer.
“In short, we are majority owners of PLDT,” she said, “And therefore, we also own the Piltel (Pilipino Telephone Corp., PLDT’s cellular phone subsidiary) because the Cojuangco put it up using PLDT money – our money.”
“(Antonio) Tony Boy (Cojuangco) could not just sell his family’s shareholdings to First Pacific Co. Ltd. because those shares are ours,” she stressed.
Asked if she would be willing to discuss the ownership issue with First Pacific managing Director and now PLDT President Manuel Pangilinan, Ms. Marcos simply said: “We’ll just see them in court.”
First Pacific recently acquired management control of PLDT for P30 billion.
“The money (the P30 billion) should go to the less privileged, as was the wish of my husband,” she said. “At hindi dapat ibulsa ng mga Cojuangcos (It’s not for the Cojuangcos to pocket),” Ms. Marcos said.
Ms. Marcos also claimed ownership of the 111,415 shares in PTIC held by the late Ramon Cojuangco’s estate. The shares, which represent an additional 26.9 percent equity in PTIC, were sequestered by the government in 1986.
On July 31, however the Supreme Court lifted the “freeze order” on the PLDT shares held by the estate of the late Ramon Cojuangco and his wife Imelda. The shares owned by Prime Holdings Inc. (PHI) were also freed on the ground that the writs of sequestration issued in 1986 were illegally only by one commissioner.
Pending resolution of PCGG’s motion for reconsideration filed with the Supreme Court, the government continues to hold on to the 111,415 shares or 26.9 percent equity in PTIC. The shares are registered in the name of PHI.
The PCGG said it had evidence to show that Prime Holdings was simply a “shell corporation” organized by Jose Yao Campos and his business associates for the benefit of the late director.
The PCGG cited Campos’ sworn statement dated March 21, 1986, revealing that the Marcos crony organized PHI and held it in trust for Marcos.
“PHI cannot be dissociated from PTIC, in the same manner that PTIC cannot be dissociated from PLDT,” the solicitor general said.
Marcos ownership affirmed
Using the PCGG’s arguments, Ms. Marcos said: “You see, the government itself insists that we own PLDT. But I also insist that we acquired PLDT without using public funds.”
Besides PLDT, Ms. Marcos said Ramon (Conjuangco) was also named by Marcos as a nominee to the Bulletin Today, which was run by Marcos’ senior aide-de-camp, the late Hanz Menzi.
Ramon was later replaced by his first cousin Danding as the Bulletin nominee.
Ms. Marcos said her husband grew fond of Danding because the latter did not only have a business acumen, he also showed skills in politics.
In fact, she said, Danding was among the few people who were consulted by the late dictator when he finalized the draft of Proclamation 1081 on martial law.
Danding and the coco industry
Because Marcos trusted Danding, Ms. Marcos said she also came to like the man.
In fact, Ms. Marcos said she was the one who thought of assigning Danding to oversee the coconut industry.
She said when she went to Cuba, she lured Peruvian Ambassador Javier Perez de Cuellar, who later became United Nations secretary general, to form an international cartel to manipulate the price of sugar.
“We made the price of sugar soar from 6 (US) cents to 21 cents,” Ms. Marcos said. “So naging masagana ang Pilipinas (the Philippines became prosperous) because at the time, the cost of production here was pegged only at 8 cents.”
Following the success in the sugar industry, Ms. Marcos said she used the same formula in boosting the coconut industry after she realized that the Philippines was producing 87 percent of the world’s copra output at that time.
Monopoly
“So we started the monopoly,” she said. “The cost of producing copra then was 14 centavos per kilo. We were able to jack up the price to 41 centavos.”
Because of the huge earnings from the coconut industry, Ms. Marcos said she decided to put up trading centers for coconut planters in Northern Mindanao, Visayas, Leyte, Bicol, Davao, Southern Tagalog and Zamboanga. The companies behind these centers were all assigned to Danding, she said.
To allow the government to earn from coconut trading, Ms. Marcos said she asked her husband to impose a 10-centavo levy per kilo of copra. “Anyway 10 centavos was just a small fraction of 41 centavos,” she said.
Ms. Marcos said that when she went to the United States for a second state visit, she asked Danding to tag along.
“Nanginginig pa yan siya at nagtatanong sa iba kung bakit raw siya pinatawag ni Ma’am (He was nervous and was asking around why Ma’am had called for him),” she recalled.
“That’s when I asked Danding to buy San Miguel and the United Coconut Planters Bank using the money we earned from the coconut firms.”
“Again, the PCGG is correct when it said the shares being held by Cojuangco in SMC and UCPB are ours,” she said. “I will take those shares back, just to prove that these were bought out of our own money.”
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