reuters/test/14921

SAN MIGUEL DEAL HIT BY MORE LAWSUITS
  A bid by San Miguel Corp (SMC) <SANM.MN>
  to buy back 38.1 mln sequestered shares from United Coconut
  Planters Bank (UCPB) has been hit by two new lawsuits, sources
  in the Philippine food and brewery company said.
      A Manila court yesterday issued an injunction barring UCPB
  from selling the shares, which represent 31 pct of SMC's
  outstanding capital stock of 121 mln shares, until hearings on
  April 21 on a petition filed by Eduardo Cojuangco, a former
  chairman of both SMC and UCPB.
      Cojuangco said the Coconut Industry Investment Fund (CIIF)
  and 1.4 mln farmers were the rightful owners of the shares.
      Cojuangco said the shares were held in trust by UCPB and
  represented a blue chip investment. His petition said UCPB's
  plans to sell the shares to SMC were "a serious breach of
  fiduciary duties."
      The SMC sources said the proposed share sale could also be
  held up by a second derivative suit filed before the Securities
  and Exchange Commission (SEC) by Eduardo de los Angeles, a
  government nominee on the company's board.
      De los Angeles, who represents SMC's minority stockholders,
  asked the SEC to block the transaction, approved last week by
  the company's board.
      On April 2 the board sanctioned the repurchase of the
  sequestered shares for 4.79 billion pesos at 126 pesos per
  share. De los Angeles told the SEC the company's retained
  earnings of 1.33 billion pesos would be wiped out by the
  purchase of the shares and would prevent the declaration of
  dividends.
      De los Angeles said the share purchase would also violate
  an SMC agreement with its creditors to maintain a 2.2-to-1 debt
  to equity ratio. He quoted SMC's chief financial director Ramon
  del Rosario as telling the board that the transaction would
  boost the ratio to 2.5-to-1.
      In petitioning the SEC, de los Angeles amended an earlier
  suit two weeks ago in which he charged SMC Chairman Andres
  Soriano III and nine other directors of violating their duties.
      De los Angeles' earlier complaint related to SMC assuming
  last December a 26.5 mln dlr loan contracted by SMC's Hong Kong
  subsidiary <Neptunia Corp> for a down payment on the shares.
  The loan assumption was again ratified by last week's board
  meeting.
      An arbitration panel set up by President Corazon Aquino to
  resolve the ownership issue is expected to submit its report by
  April 15.
      "The amended suit filed by Eduardo de los Angeles is part of
  a continuing attempt by certain elements, in complete disregard
  of the facts and with questionable motives, to delay an early
  disposition of the sequestered shares," San Miguel Corp said in
  a statement.
      "Coming as it does, when San Miguel Corp and UCPB have
  reached agreement on the price of the shares and the method of
  payment, this suit is in direct contravention of the
  government's expressed desire to reach an amicable settlement
  of the controversy by April 15," the statement added.
      A San Miguel spokesman said he had no comment on
  Cojuangco's court petition, adding: "Any statement coming from
  us might be interpreted as adversarial."
      Meanwhile, Ramon Diaz, the head of a government panel which
  sequestered the shares last year, said Soriano was not eligible
  to buy the major portion of the shares because he was a United
  States citizen.
      The sequestered shares are split into 24 mln "A" shares,
  which can only be owned by Filipinos, and 14 mln "B" shares which
  are available to foreign buyers.
      SMC sources said Soriano personally was not among
  prospective buyers. They said the shares would be purchased by
  the <A.Soriano> group of companies, SMC, Neptunia and unnamed
  institutional investors. Soriano was named as one of the buyers
  in a bid in March 1986 for 33 mln shares controlled by UCPB.
      The sale was aborted when Diaz's Presidential Commission on
  Good Government sequestered the shares on suspicion they were
  owned by Cojuangco, a close associate of former President
  Ferdinand Marcos. Cojuangco lives in self-imposed exile in the
  U.S.. The shares grew to 38.1 mln after a 15 pct stock dividend
  announced last June.
      "We have no objection to Soriano buying the "B" shares," Diaz
  told Reuters. "But everything is on hold now."
      The SMC spokesman said he did not know if the controversy
  would be resolved before the company's annual stockholders'
  meeting, scheduled for May 14.
      San Miguel Corp reported sales revenue of 12.2 billion
  pesos in 1986, 11 pct above its 10.9 billion peso sales in
  1985. It said unaudited net profit was in the neighbourhood of
  700 mln pesos, an increase of about 50 pct over 1985.