Close  

Razon firm files case to seize rival’s assets

By: - Correspondent / @nestorburgosINQ
/ 04:30 AM March 13, 2019

ILOILO CITY — A company controlled by ports mogul Enrique Razon on Monday filed an expropriation case against Panay Electric Co. Inc. (Peco), just days after Peco sued the Razon firm for what Peco said were unconstitutional provisions in the Razon company’s franchise allowing it to seize Peco assets.

The cases filed by both firms, according to a top official of More Electric and Power Corp. (More Power), had narrowed the window for negotiations.

ADVERTISEMENT

Not retaliation

In the case for eminent domain filed in the Iloilo City Regional Trial Court, More Power sought to take possession of Peco facilities.

FEATURED STORIES

Roel Castro, More Power president, said the case was among the company’s options in the exercise of its franchise and was not in response to a petition filed by Peco on March 6 to stop More Power’s takeover.

But Castro said the cases firmed up More Power’s position that no amicable settlement between the two companies was possible at the moment.

“Up to the signing of our franchise into a law and the start of the effectivity of the franchise, there were no talks (to settle),” Castro said.

P400-M offer

He said More Power was still open for talks for a settlement if Peco would not take an “adversarial” position.

He said More Power’s case included an offer to pay Peco at least P400 million for its facilities.

On March 6, Peco filed a petition for declaratory relief in a Mandaluyong court to stop More Power from taking control of its facilities.

ADVERTISEMENT

It asked the court to issue a temporary restraining order and a preliminary injunction to stop More Power, the Energy Regulatory Commission (ERC) and the Department of Energy from exercising the franchise granted to More Power.

The franchise, Republic Act No. 11212, allowed More Power to “establish, operate and maintain” an electric power distribution system in Iloilo City, which has at least 55,000 consumers.

No track record

President Rodrigo Duterte signed the 25-year franchise of More Power on Feb. 14. It became effective on March 6.

More Power, a new company with no distribution assets and track record in the power industry, has to build its own assets or acquire existing ones under the transitory provisions of its franchise.

Peco, in its petition, also asked the court to declare certain provisions of RA 11212 as invalid or unconstitutional, including the provision allowing More Power to expropriate Peco’s assets.

Oppressive

“The grant of authority to expropriate all of petitioner Peco’s assets is arbitrary and unduly oppressive,” said Peco’s petition.

“It basically allows respondent More to arrogate unto itself what it could not otherwise lawfully acquire,” it said.

Peco’s franchise expired on Jan. 18 and it is operating under a Certificate of Public Convenience and Necessity issued by the ERC, valid until May this year.

Owned by the Cacho family, Peco has been operating in the city since 1923.

Subscribe to Inquirer Business Newsletter
Read Next
Don't miss out on the latest news and information.

Subscribe to INQUIRER PLUS to get access to The Philippine Daily Inquirer & other 70+ titles, share up to 5 gadgets, listen to the news, download as early as 4am & share articles on social media. Call 896 6000.

TAGS: Enrique Razon, More Power, Panay Electric Co. Inc., Peco, Roel Castro
For feedback, complaints, or inquiries, contact us.


© Copyright 1997-2020 INQUIRER.net | All Rights Reserved

We use cookies to ensure you get the best experience on our website. By continuing, you are agreeing to our use of cookies. To find out more, please click this link.