Vicoyski's Eye

May 27, 2008:  I just got home at past 11PM in the evening, after the Meralco Stockholders' Meeting finally adjourned at around 10:30PM.  I am told that it is the longest stockholders' meeting that has ever been held by the company.  I attended in my capacity as a common share stockholder.  My shares, though, aren't  that significant in volume.  Hehe... (Pics taken with my P990i)

Meralco is currently the subject of what appears to be a hostile takeover attempt led by one of it's own directors, Mr. Winston Garcia, who represents the investments of the Government Service Insurance System and several other government institutions.  His stated purpose is that he wants to bring down the cost of power by replacing management, firing lots of people and doing away with a lot of established employee benefits.  His reasons are highly dubious, as he is targeting Distribution cost which accounts for only 12% of the average electric bill and Meralco's Independent Power Producer (IPP) contracts.  These are contracts that are known to be cheaper than the transition supply contracts with the National Power Corporation (NPC) and rationalized purchases at the Wholesale Electric Spot Market (WESM).

Anyway, I saw firsthand, corporate drama in real life.  Obvious, but savvy, corporate raiding moves, that some would interpret as an underhanded attempt to subvert the proxy nominations under the name of recognized Meralco management representatives.  A director from the Securities Exchange Commission (SEC) conveniently coming out with an order to remove the Asst. Corporate Secretary, Atty. Tony Rosete, and invalidate all proxies under Meralco management supportive directors, at the exact moment that Mr. Garcia made a signal by pulling-out a manila envelope and flashing its content.  An order that was subsequently junked by a majority of the board on the grounds that it was undated, was signed only by a SEC Officer-In-Charge, didn't have the official seal of SEC, and doesn't even have the necessary docket number to be considered a legal order.

 

What I believe is the funniest (others would say scariest) part of the whole proceeding was when Mr. Garcia began losing his composure due to the heckling of a number of Meralco employee-stockholders.  He began stating, as I remember it, "...I have more shares than all the (Meralco) employees here combined!"  It is indeed something that is true...  However, his seemingly childish outburst showed great arrogance, considering that he doesn't own, but only represents the shares of government employees who have very little say as to where he invests their GSIS retirement money.

Anyway, balloting on issues raised and the election of new directors got underway, way past lunch time.  And, due to the contesting of several proxies by GSIS legal representatives, the results weren't released until past 10PM. The recess after the balloting turned-out to be over 9 hours long.

With favorable election results, this battle may have been won by Meralco's current management.  However, Mr. Winston Garcia promises that the war is far from over.

In the meantime, the value of my shares have again dropped significantly...