the rp govt loses its case againts the mighty lucio tan


MANILA, Philippines -- Tobacco tycoon Lucio Tan scored a major
victory against the government after the Supreme Court upheld a
Sandiganbayan ruling that there was no basis for the seizure of Tan's
assets in four companies, including his flagship Fortune Tobacco
Corp., in 1986.

In upholding the Sandiganbayan ruling in favor of Tan and several
others, the high court said the Presidential Commission on Good
Government failed to show that it had evidence that the shares in the
companies were ill-gotten before it issued the sequestration orders.

The high court said it found that the PCGG--the agency created in 1986
to recover the ill-gotten assets of the late dictator Ferdinand
Marcos, his family and his cronies--had no sufficient reason to take
over the shares.

"There is no evidence presented by petitioner that they belong to the
Government of the Philippines or any of its branches,
instrumentalities, enterprises, banks or financial institutions.

"Nor is there evidence that respondents, taking undue advantage of
their connections or relationship with former President Marcos or his
family, relatives and close associates, were able to acquire those
shares of stock," the high court said in its Dec. 7 decision.

The Supreme Court was acting on a petition from the PCGG asking the
high court to reverse a 2006 Sandiganbayan decision ordering the
government to lift the sequestration on the shares of stock in four
companies owned by Tan--Allied Banking Corp., Foremost Farms, Fortune
Tobacco Corp. and Shareholdings Inc.

The shares were sequestered in 1986 following the people power
revolution that brought down the Marcos dictatorship.

The case involves a 20-year-old suit, Civil Case No. 005, that the
PCGG filed against Tan and the Marcoses, claiming that Tan's assets
were part of the dictator's ill-gotten assets.

The government's case against Tan is based mainly on a cross-claim on
the Tan companies by Imelda Marcos, the dictator's widow, who declared
to the Sandiganbayan that her husband was the beneficial owner of most
of the Tan companies.

In her court filing, Imelda revealed the details of an elaborate 60-40
wealth sharing scheme between Marcos and Tan. She said that 60 percent
of the Tan holding company, Shareholdings Inc., was really owned by
the Marcoses.

Tan, the country's third richest individual with a fortune of $2.3
billion according to Forbes magazine, has repeatedly denied he was a
crony of Marcos and that he acquired control of several firms at
preferential prices.

The government is also still trying to recover P25.4 billion in
allegedly unpaid taxes from him.

Not setback
The PCGG on Friday was undeterred by the Supreme Court decision,
insisting that it was "not a setback" for the agency.

Jay Miguel, the PCGG's head of legal services, said the purpose of the
sequestration, which was to prevent Tan from dissipating the assets of
the companies suspected to be part of the ill-gotten wealth of Marcos,
was still being achieved.

"There is still an ongoing case with the Sandiganbayan. The defendant
couldn't dispose of anything anyway because these assets are deemed to
be in custodia legis [in the custody or keeping of the law]," he said.

Miguel said the Supreme Court decision dealt only with the
administrative aspect of the case.

"It didn't fully say whether the properties are ill-gotten [or not].
We're still in the process of presenting evidence, witnesses and
documents with the Sandiganbayan," he said.

"This isn't over yet," he said in a telephone interview.

21 years ago
The 73-year-old Tan, who was born in China's Fujian province and moved
to the Philippines as a child, keeps a low profile, shunning
interviews and preferring to traverse Manila by helicopter.

"It can only be a positive thing for all of us in the group," Cecilia
Pesayco, group secretary for the Tan-owned Philippine National Bank,
said of the Supreme Court ruling.

"It's 21 years already and it has really limited the bank and the
group from expanding," Pesayco said.

In its Dec. 7 ruling, the Supreme Court said it was necessary that the
sequestration orders be backed by "prima facie factual foundation,"
meaning it is accepted as correct until proven otherwise so that the
parties claiming to own the assets can contest the sequestration's
validity, including going to the courts.

It said this opportunity to contest would be meaningless unless there
is a record which the reviewing authority can use as a basis for
determining whether the sequestered property was ill-gotten or whether
the PCGG had acted illegally.

No reason for TRO
It said such records, which should have included the reason the
government wanted to seize the shares of stock and the record of
proceedings that were the basis for the sequestration orders, were not
present.

The high court also found no reason to grant the PCGG's plea for a
temporary restraining order on the antigraft court's 2006 ruling.

It also rejected the PCGG's argument that the Sandiganbayan encroached
on its jurisdiction, and that the antigraft court substituted its
judgment for that of the PCGG.

It said that when sequestration orders are nullified for lack of
showing that the assets are ill-gotten, the courts are not replacing
the PCGG's judgment with their own but are just applying the law.

Marcos Jr. as witness
The assets being contested are a combined 60 percent of nine Tan
companies--Fortune, Asia Brewery, Allied Banking, Foremost Farms,
Himel Industries, Granspan Development Corp., Silangan Holdings,
Dominium Realty and Construction Corp. and Shareholdings Inc.--which
the PCGG wants forfeited in favor of the state.

Earlier this year, the Sandiganbayan summoned the dictator's son,
Ilocos Norte Rep. Ferdinand Marcos Jr., to identify the deeds of
assignment and corporate records to prove the beneficial interest of
the Marcos family in the assets of Tan.

With a report from Daxim Lucas
.