The provision allows Prime to force a buyout of First Gen’s 33 percent stake at a 25 percent discount if Piki and his “designates” are ousted, effectively putting a price on any leadership change.
Piki Lopez is the CEO of First Gen, one of the county's biggest power producers.
No PSE disclosure
The Lopez majority said the clause was never disclosed by First Gen to the Philippine Stock Exchange despite its material impact.
“This is self-dealing at the expense of all First Gen shareholders and for the exclusive benefit of Piki and his cohorts. We only learned about it and the whole transaction when it was presented at a board meeting that concealed the investment under ‘other matters’ and discussed in an executive session for only one hour”, the majority faction led by Eugenio “Gabby” Lopez III said in a statement.
Huge discount
The clause allows Prime to buy out First Gen’s stake at a steep discount if current management is removed.
“What we know is that if Piki and the present First Gen management are removed, Prime will have the option to buy out First Gen’s 33 percent equity in Prime’s hydropower business at a 25 percent discount, or more than a P16 billion off the P62-billion investment”, it added.
Governance questions rise
The Lopez, Inc. board voted 5–2 to remove Piki for cause and loss of trust, but a court order blocked the move and barred his removal across related companies.
The majority is also questioning why First Gen reduced its stake to 33 percent, effectively giving up its ability to block key decisions.
“We do not know why he didn’t just go down to 33 percent plus one share to keep his veto power and whether Prime paid a premium for being handed full control. We are blind to everything”, it added.
—Edited by Miguel R. Camus
