Pimentel1

NOT SO FAST

May 17, 2024 People's Journal 202 views

MORE lawmakers have expressed opposition to the advanced renewal of the franchise that Congress has given to the power distribution utility Manila Electric Company.

Calls for Meralco to answer allegations of franchise violations are getting louder as some House members move to renew the utility’s franchise four years ahead of its expiration or in 2028 yet.

Among those who joined the opposition to the move was Surigao del Sur Rep. Johnny Pimentel, vice chair of the House legislative franchise committee, which is currently discussing Meralco’s bid for an early franchise renewal.

Pimentel echoed the appeal made previously by a colleague, Sta Rosa City Rep. Dan Fernandez, for the House to carefully review the Meralco franchise before acting on it.

Pimentel said he agreed that the power distribution giant should first answer the issues presented to the committee against the utility’s practices.

At a hearing of the committee on Monday, Pimentel raised questions about Meralco’s change of ownership from the Lopez clan to the group of billionaire Manuel V. Pangilinan.

The ownership change took place in 2009 yet but 25 years later, Congress has not been formally informed of the process. The law granting the Meralco franchise passed by Congress was for the then Lopez company.

“Did you seek permission for Congress for change of ownership?” Pimentel asked Meralco representatives at the hearing.

Lawyer Ray Espinosa, Meralco director, answered no. He said there was “no change in controlling interests” which meant no approval was needed from Congress.

Pimentel said he deemed the failure to ask Congress permission as “illegal.” He said the situation is similar to that of Sonshine Media Network Inc. (SMNI) which also failed to declare to Congress its change of ownership.

SMNI is required by the law that granted its 25-year franchise, RA 11422, to declare and seek approval from Congress any ownership change.

The same mandate, Pimentel said, applies to RA 9209, the law that granted Meralco its franchise and which would expire in 2028.

Espinosa said that, indeed, there was a change in ownership of Meralco which also assumed the franchise granted by Congress.

Between 2009 and 2012, the Lopezes’ stake in Meralco was diluted to 33.4 percent after the clan sold shares to the First Pacific Group of Pangilinan. The stake was further diluted to 3.95 percent in 2012.

First Pacific, through Beacon Electric Asset Holdings Inc and Metro Pacific Investment Corp., currently holds 45.46 percent of Meralco shares.

Pimentel warned Meralco that the failure to declare and seek Congress approval of the ownership change was sufficient ground to reject renewal of the Meralco franchise.

“That issue is exactly what I raised—if Meralco did not violate the provision of their franchise that any change in ownership they should ask prior approval from Congress,” Pimentel said at the hearing.

“This violation was one of the grounds to revoke the franchise of SMNI,” Pimentel said in an interview.

“In my opinion they have the same predicament as SMNI and they may be held liable for the violation of said provision,” Pimentel stressed.

SMNI openly admitted to transitioning from a non-stock, non-profit corporation to a sole corporation under disgraced preacher Apollo Quiboloy in 2006. In 2023, the controlling stake was transferred to Bro. Marlon Acobo, with both transactions taking place in the absence of Congress’ approval.

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