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Oscar
Lopez is a prominent, formidable figure in the local
business community. He is the current patriarch of the
very powerful and influential Lopez family, having
filled the shoes of the late Genie Lopez.
Genie,
who was fondly called Kapitan by peers and subordinates,
was, of course, the head honcho of the family when he
was still around. But he is more widely remembered now
as the man who nurtured ABS-CBN to its current
preeminent stature in the local media industry. His son
Eugenio “Gabby” Lopez III now heads the media network.
Oscar
now speaks for the entire gaggle of Lopez business
interests, being chairman-CEO of First Philippine
Holdings Corp. (FPHC), the holding company. He is the
elder brother of Manolo Lopez, Manila Electric Co. (Meralco)
chairman-CEO.
The
Lopez financial empire includes, but is certainly not
limited to, four principal businesses, namely, First Gen
Corp. (power generation), Meralco (power distribution),
First Philippine Infrastructure (North Luzon Expressway)
and Philippine Electric Corp. (manufacturing utility
transformers, meters). These four, including several
subsidiaries, all of which are on a break-neck expansion
mode, are the Lopez family’s great money mills.
In his
report to the 46th annual stockholders’ meeting just
this week, Oscar Lopez reported a modest net income of
P4.475 billion. But that nicely understates the coming
of a new wave of subsidiaries in their corporate
pipeline.
The ABS-CBN
radio-television network is separate and distinct from
the “core” businesses of the Lopez family. It was,
arguably for political and defensive reasons, that ABS-CBN
was set up by the late Eugenio Lopez, in partnership
with his brother, the late former Vice President
Fernando Lopez. It was set up in pre-martial law days at
the height of the political power and influence of the
sugar barons of yore, dating as far back as the Elpidio
Quirino era.
Documented accounts suggest that what we now know as the
ABS-CBN media giant was set up to serve as the royal
guard of all the family’s financial and political
interests. Picture a monolithic castle as a
representation of the Lopez empire. Within are the vast
treasures of the realm. The protective moat, turrets,
armory, towers and all defensive facilities are all run
by the ABS-CBN network.
With the
network’s formidable nationwide reach, rare is the
politician with ambitions to fame and ultimate power
(the presidency) who would dare challenge the supremacy
of the castle’s principal occupants.
Now, how
did the Lopezes get to where they are now? We only
vaguely remember that at one point in recent history,
the Lopezes seemed to have lost it all. That was when,
under President Ferdinand Marcos’s martial-law regime,
they were practically banished from society and branded
as a vicious oligarchy. We also recall, but not too
clearly how, the Lopezes were luckily able to recover
Meralco and ABS-CBN in 1986, courtesy of Cory Aquino,
based on a claim that they were victims of martial law.
It may
be useful to take a glimpse of the past to put in
perspective the current raging controversy, at the
center of which is Meralco, and the oppressive power
rates it has been imposing on the people.
In his
book Greed and Betrayal, journalist Cecil Arillo
(now an academician with a master’s degree from the
Pacific Western University in Los Angeles) gives a fully
documented account of how the Lopez family grew to be so
financially and politically powerful under 10
presidents, from Manuel Quezon to Cory Aquino. Chapter
15 is all about this family, which only this year was
ranked by Forbes magazine as the 10th richest in the
Philippines.
Arillo
implies that the phenomenal growth of the Lopez
financial empire largely sprung from its control of
Meralco.
It is in
this chapter where Arillo chronicles the Lopez family’s
rise and fall, and its eventual recovery starting in
1986, when Aquino assumed power. Here are excerpts from
Chapter 15 of Greed and Betrayal:
“Since
Meralco was acquired by the Lopezes, it was transformed
from a highly profitable organization distributing power
to the Greater Manila Area into a hydra-headed monster
that branched out into real estate and construction,
petroleum refining and the manufacture of electric goods
and merchandise.
“Ever
since the Lopezes took over Meralco, they were able to
secure approval for several rate increases using their
political influence in the Public Service Commission, at
the same time raking in huge profits at the expense of
the consumers…
“One
particular document revealed that the profits derived by
Meralco through excessive power-rate increases were used
by the Lopezes in sundry undertakings far removed from
the main business of Meralco.
“A set
of documents found in a steel cabinet in Channel 4
during the 1989 coup attempt said that Meralco, under
the Lopezes, grew so huge that it defied the powers of
the president, and any government attempt to curb its
greed was called oppression or fascism. It resisted
government efforts to collect legitimate taxes on its
income and its imports, passing off its defiance as
enlightened criticism of the government.
“According to the documents, Meralco Securities Corp. [MSC]
violated provisions of the Internal Revenue Code when it
did not report its true gross income. In 1969, this
company received regular dividends from Meralco
amounting to P233.25 million. But MSC reported as its
gross income only 25 percent of the amount or P58.31
million.
“For its
crude-oil importation, Meralco bought a total of
32,583.65 metric tons but paid only P13,033 specific
tax.
“Since
1965. . . the Lopezes had remitted abroad a total of
$44,164,671.11 for payment of contractual obligations
and services rendered by some people. However one looked
at it, the dollar reserves of the country were depleted
considerably and the fact that one family did it must be
viewed as grave abuse of power, said the documents.
“The
Lopezes through their advantages were able to borrow a
grand total of $245,353,906.95 from foreign financial
institutions. Documents revealed that Benjamin [Kokoy]
Romualdez inherited this huge indebtedness when he
acquired Meralco after Marcos declared martial law in
1972. . . .
“When
the Lopezes retook Meralco, ABS-CBN and other
corporations after the Edsa uprising, they claimed that
they were victims of the Marcos regime.
“But a
set of documents gathered by this writer belied their
claim, showing that they sold their Meralco shares
without duress on December 16, 1974, to Meralco
Foundation Inc., which assumed the indebtedness of
Benpres Holdings in Meralco Securities Corporation to
foreign and local banks amounting to P101.1 million.
“The
deed of sale was guaranteed by the Philippine National
Bank through a letter of credit it issued to the
foundation for the purchase of the Benpres shares of
stock.
“The
foundation also assumed Benpres’ P9.5-million debt on
stock subscription and an obligation to pay Benpres
P48.6 million on its equity, payable by installment over
a 10-year period at a 10-percent interest on the unpaid
balance.
“In
other words, what this particular set of documents
showed was that the Lopezes were not victims of martial
law, but were in fact beneficiary of martial law, when
Marcos helped them out of their financial mess.
“What
was ironic was that the takeover by the Lopez family of
the Meralco. . . was shrouded in mystery despite
President Aquino’s avowed policy of full disclosure and
transparency. . . .”
Omerta_bdc@yahoo.com |
