G.R. No. 91925 - Cojuangco, Jr. vs. Roxas

Two petitions, G.R. Nos. 91925 and 93005, involve disputes over the exercise of voting rights in San Miguel Corporation (SMC) during the respective annual stockholders’ meetings held in 1989 and 1990.
Petitioners, consisting of key stockholders such as Eduardo M. Cojuangco, Jr., Manuel M. Cojuangco, Rafael G. Abello (and in one instance Enrique M. Cojuangco), claimed that their shares were improperly voted by the Presidential Commission on Good Government (PCGG).
The petitioners asserted that the corporate shares, although placed under sequestration, must be voted by their actual owners or their duly authorized representatives, not by the PCGG.

The meeting was held on April 18, 1989, for electing fifteen members of the board of directors.
The petitioners held a specific number of shares:

There were 140,849,970 shares outstanding with 94.58% attendance (in person or by proxy).
The PCGG was allowed to vote the sequestered "corporate shares" held by various entities, which together accounted for a large number of votes (27,211,770 shares generating more than 1.2 billion votes).
As a consequence, the PCGG’s votes altered the outcome of the election. Certain candidates received elevated vote tallies, and those with the highest votes were declared elected to the board.
Petitioners computed an alternative vote tally had the sequestered shares been voted by their rightful owners, arguing that, if counted as such, they would have been elected instead of some of the declared board members.
On May 31, 1989, petitioners filed a quo warranto petition with the Sandiganbayan challenging the PCGG’s authority to vote the sequestered shares, affecting the election of board directors.

The meeting was held on April 17, 1990, with similar issues concerning the election of the board for the ensuing year.
Petitioners in this instance held:

Out of 565,916,550 shares outstanding, 93.58% were present or represented at the meeting.
The PCGG voted the sequestered corporate shares held by a multitude of entities, tallying a significant number of votes (108,846,948 shares).
The PCGG’s voting again influenced the outcomes, resulting in the election of fifteen board members with high vote counts.
Petitioners argued that if the votes had been cast by the actual shareholders, the results would have been materially different, and several individuals (such as Adolfo S. Azcuna, Edison Coseteng, and Patricio Pineda) should have been ousted from the board.

The PCGG based its actions on a Presidential memorandum dated June 26, 1986, which purportedly authorized it to vote sequestered shares pending the resolution of ownership disputes.
Petitioners contended that such authority is contrary to the principle that sequestration does not divest the actual owners of their rights, particularly the right to vote.
Representatives of the corporate shares contested the PCGG’s intervention by maintaining that the sequestered shares should be voted by their bona fide owners or proxies.
The Sandiganbayan had dismissed the petition initially for lack of cause of action, a decision later called into question by the petitioners as an abuse of discretion.

Whether the PCGG, acting as a conservator over sequestered assets, possesses the authority to vote the sequestered corporate shares of SMC at the shareholders’ meetings.

Does the act of sequestration transfer voting or strict ownership rights to the PCGG?
Should the sequestered shares be voted by the executive commission (PCGG) or solely by the actual shareholders?

Whether the decision of the Sandiganbayan dismissing the petition for lack of a cause of action constitutes a grave abuse of discretion that affects subsequent shareholders’ meetings and board elections.

Is the PCGG’s exercise of the power to vote consistent with its role as merely an administrator or conservator?
What constitutes a proper exercise of the PCGG’s authority in relation to voting and other acts indicative of ownership?

Whether the set of safeguards prescribed by the Court adequately balance the rights of the actual stockholders with the need to prevent the dissipation of corporate assets pending final judicial resolution.