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Land sale had court blessing—SM

[ manilastandardtoday.com ] June 25-26, 2011

THE sale of the 12-hectare vacant property in front of the Tiendesitas Market by the government to the SM Group was above-board, was approved bv the Sandiganbayan anti-graft court, and earned the government P1 billion and not P93.7 million, the SM Group said in a statement Friday.

The group issued the statement after the Presidential Commission on Good Government filed a a case early this week to rescind the 2010 sale, claiming the government lost over P3 billion based on the property’s zonal valuation.

The property along C-5 had been mired in litigation for nearly four decades when the SM Group approached the contending claimantsx-the previous PCGG, the Government Service Insurance System, and alleged Marcos crony Peter Sabido, who had obtained a lease-purchase agreement on the GSIS property way back in 1975.

Sabido’s company, Philippine Integrated Meat Corp., was able to sign a supplementary loan agreement with the Marcos government that allowed it to acquire the property for 28 years, or until 2009, and by paying only an annual rental of P3.3 million.

After the 1986 People Power Revolution, however, the government not only rescinded the lease agreement but also sequestered 30 percent of Sabido’s company. Sabido, the PCGG and GSIS subsequently sued and counter-sued each other, with the cases going back and forth in the Sandiganbayan and the Supreme Court.

But Sabido in July 2006 obtained a crucial victory from the Sandiganbayan, which upheld the legality of Pimeco’s lease-purchase agreement with the GSIS despite Sabido and his Pimeco’s failure to update its lease payments to the government.

To end the four-decade dispute, the SM Group, through a subsidiary, proposed a compromise solution in which, essentially, it would acquire controlling ownership of Pimeco by purchasing Sabido’s 55 percent and the 30 percent stake held by the PCGG, and then settle Sabido’s liabilities with the GSIS.

SM said it successfully cobbled together a compromise agreement among the claimants for P1.1 billion on April 25, 2010, a month after the Sandiganbayan approved the settlement, with the government, through the GSIS, getting P1 billion for the property.

“The compromise among the parties concerned assured each of the parties immediate and reasonable recovery of their respective investments, as allowing the status quo to take its natural course would involve more time lost and the property remaining idle,” SM said.
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