Purchase of Pasig lot aboveboard, says SM
SM on Friday said the 2009 sale of the property of Meat Packing Corp. of the Phils. (MPCP) to Consolidated Prime Development Corp., a member of the SM Group, was aboveboard.
In a statement, SM said the deal was consummated following Sandiganbayan’s March 24, 2010, approval of the compromise agreement between and among the Presidential Commission on Good Government (PCGG), the Philippine Integrated Meat Corp. (Pimeco) and Peter Sabido, the controlling shareholder of Pimeco.
SM said the Supreme Court on June 16, 2010, ordered the termination of the petition of the MPCP and the Government Service Insurance System (GSIS) seeking to review the July 2006 ruling of Sandiganbayan that upheld the lease purchase agreement (LPA) between MPCP and Pimeco.
The high court issued the resolution after the MPCP/GSIS, Pimeco and Sabido made a manifestation on March 29, 2010, that they had amicably settled the earlier petition to review the Sandiganbayan ruling upholding the LPA.
Amicable settlement
The amicable settlement was reached following Consolidated’s initial discussions in 2009 with PCGG and MPCP/GSIS to support the financial requirements for the compromise and its intention to acquire the 12.29-hectare property along C-5 in Barrio (village) Ugong, Pasig, owned by MPCP, SM said.
“The sale of the property is, in fact, a 36-year-old issue,” SM said.
On Nov. 3, 1975, MPCP entered into an LPA with Pimeco. This was followed by a supplementary loan agreement signed in 1981 between MPCP and Pimeco consolidating the latter’s arrearages into one amounting to P93.7 million payable in 28 years or for an annual rental of P3.3 million (July 1981 to 2009).
SM said the issue on the sale of the MPCP property became the subject of legal battle starting in 1986 when MPCP extrajudicially rescinded the agreement with Pimeco for the latter’s arrearages in rentals.
Based on the agreement between MPCP/GSIS and Pimeco, the total amount of the property for 28 years payment terms (from July 1981 to 2009) is almost P93.7 million.
Pimeco was then owned 55 percent by Sabido and 30 percent by Independent Realty Corp. (IRC).
SM said Consolidated sought to acquire controlling ownership of Pimeco by purchasing Sabido’s and IRC’s respective shareholdings with the approval of the PCGG.
Better deal for gov’t
On April 25, 2010, the MPCP/GSIS and Pimeco executed a deed of absolute sale to implement the compromise agreement for a consideration of P1.1 billion.
“If the LPA would have been implemented in favor of Pimeco that would gave Pimeco the right to purchase the property at almost P93.7 million only as set in the agreement and could have been more disadvantageous to the government compared to the P1.1 billion (excluding shares of PCGG and Sabido) compromise deal where all parties involved (PCGG, GSIS, MPCP, Sabido) were paid accordingly,” SM said.
“The compromise among the parties concerned (government through PCGG, Sabido, MPCP and GSIS) was seen to assure each of the parties of immediate and reasonable recovery, as allowing status quo to take its natural course would involve time lost and the property remaining idle,” SM added.
