ASEAN KEY DESTINATIONS
May 28, 2008
The Lopez family retained control of Manila Electric (Meralco), the Philippines' largest power utility, on Tuesday, defeating an attempt by a state pension fund to shake up management in a row over power rates, Reuters reported.
Pension fund GSIS, which owns around 25 percent of Meralco, tried to wrest control of the group from the Lopez family by preventing the re-election of officers loyal to the clan at the company's annual meeting in Manila.
But Meralco's board shrugged off GSIS's attempt to halt proceedings and in a vote, which was delayed by at least 10 hours and marked by high turnout, the Lopez family retained majority control over the 11 person board.
"I feel great because we won and that is how it should be," said Oscar Lopez, chairman of First Philippine Holdings Corp, a holding firm of the Lopez family, which owns 33 percent of Meralco.
"It was a diabolical plan of Winston," he told Reuters.
Winston Garcia, the head of GSIS, had led a campaign against the Lopez family's management of Meralco, arguing that it was not doing enough to bring down power rates.
Critics say Meralco buys power at high rates from Lopez-owned generating firms and does not do enough to prevent illegal tapping of electricity, the cost of which is passed on to consumers.
The Lopezes are one of the Philippines' most powerful dynasties with two power generation plants and geothermal firm PNOC EDC, as well as the country's biggest media firm, ABS-CBN Broadcasting Corp, among their assets.
Philippine electricity rates are among the highest in Asia due to expensive deals with private power producers, the country's reliance on costly imported oil to generate electricity and widespread illegal tapping.
Meralco says it has to pay high prices for power bought from all generating firms, including those belonging to state-run National Power Corp, whose ageing facilities mean it costs more to produce energy.