24 June 2003
FDC calls on Meralco stockholders: vote Lopezes out; democratize Meralco ownership and management through consumer representation
As Meralco holds the annual stockholders meeting today to elect a new set of Directors, the Freedom from Debt Coalition urgently calls on the Lopez management to make a complete accounting of their past actions to its stockholders.
Further, FDC demands the resignation of the Lopez management, so that the stockholders can pave the way for the democratization of Meralco’s ownership and management through consumer representation.
Under the Lopez management, Meralco has incurred heavy obligations to both domestic and international banks. It has passed on its P30.3-billion income tax expenses to consumers since 1994. Meralco frantically negotiates with creditors to defer payment of its P6-billion short-term obligations maturing within the year; it shamelessly colludes with the Energy Regulatory Commission to defer its refund to consumers. This is the mess that the Lopez management brought to Meralco.
Market failure and the 1997 Asian contagion cannot be solely blamed for Meralco’s predicament. Occupying a captive market equivalent to 48 percent of the country’s total GDP, Meralco is a viable venture. In making questionable management decisions and unsustainable acquisitions, Meralco incurred losses. This proves that the present management lacks competence and visionary zeal to make Meralco viable and sustainable.
Meralco is a public utility imbued with public interest: it should not be treated as a mere business enterprise. But the Lopezes turned Meralco into a simple business venture by putting profit before public service. The result: heavy losses for Meralco and a consumer base reeling under oppressive electricity rates.
With the Lopezes remaining at the helm of Meralco, the Distribution Utility and its consumers will always be at the receiving end of their bad management style. Stockholders should thus vote out the present management and install a new one that is competent, accountable, honest, and faithful to serving the public interest.
Further, there should be consumer representation through a refund in shares of ownership. As a show of goodwill to service, Meralco stockholders should allow the refund’s conversion into shares and give consumers representation to the policy-making bodies – meetings of stockholders and of the Board of Directors.