Pimentel says Meralco committed same 'mistake' as SMNI; find out what 

Surigao del Sur 2nd district Rep. Johnny Pimentel (Facebook)

Surigao del Sur 2nd district Rep. Johnny Pimentel has cited a glaring similarity between the Manila Electric Company (Meralco) and television network Sonshine Media Network Inc. (SMNI) that could possibly doom the power distribution giant's franchise renewal application. 

According to Pimentel, Meralco committed an infraction when it failed to inform Congress that it had undergone a change in ownership some 15 years ago. 

At a hearing of the House Committee on Legislative Franchises Monday, May 16, Pimentel raised questions about Meralco’s change of ownership from the Lopez clan to the group of billionaire Manuel V. Pangilinan.

The ownership change took place in 2009, and Congress has not been formally informed of the process, Pimentel said. He noted that the law on Meralco's existing franchise, Republic Act (RA) No.9209, was for the Lopez company. 

The veteran legislator is a vice chairman of the committee, which is hearing Albay 2nd district Rep. Joey Salceda's House Bill (HB) No.9793. The bill is seeking a 25-year extension to Meralco's franchise ahead of its expiration in 2028. 

"Did you seek permission for Congress for change of ownership?” Pimentel asked Meralco representatives at the hearing.

Lawyer Ray Espinosa, Meralco director, answered in the negative, but claimed there was “no change in controlling interests”, which meant no approval was needed from Congress. Pimentel responded by saying that he deemed the failure to ask Congress permission as “illegal.” 

He said the situation is similar to that of SMNI, which also failed to declare to Congress its change of ownership. SMNI is required by the law that granted its 25-year franchise, RA No. 11422, to declare and seek approval from Congress any ownership change. 

The same mandate, Pimentel said, applies to RA No.9209. Espinosa said that, indeed, there was a change in ownership of Meralco which also assumed the franchise granted by Congress.

Between 2009 and 2012, the Lopezes’ stake in Meralco was diluted to 33.4 percent after the clan sold shares to the First Pacific Group of Pangilinan. The stake was further diluted to 3.95 percent in 2012.

First Pacific, through Beacon Electric Asset Holdings Inc and Metro Pacific Investment Corp., currently holds 45.46 percent of Meralco shares.

Pimentel warned Meralco that the failure to declare and seek Congress approval of the ownership change was sufficient ground to reject renewal of the Meralco franchise.

“That issue is exactly what I raised—if Meralco did not violate the provision of their franchise that any change in ownership they should ask prior approval from Congress," the Mindanaoan said in the hearing.
 

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Pimentel later said in an interview that the particular violation "was one of the grounds to revoke the franchise of SMNI". 

"In my opinion they have the same predicament as SMNI and they may be held liable for the violation of said provision," he underscored. 

SMNI openly admitted to transitioning from a non-stock, non-profit corporation to a sole corporation under the controversial Pastor Apollo Quiboloy in 2006. In 2023, the controlling stake was transferred to Bro. Marlon Acobo, with both transactions taking place in the absence of Congress’ approval.

The SMNI franchise, through RA No.11422, required congressional approval for ownership changes by the franchise holder.

Pimentel also questioned the apparent rush to renew Meralco’s franchise. "It's only 2024. Four years more...Why apply for renewal of a franchise that is set to expire four years from now?” he said.