Revoking the SDP revokes the SDOA

In their petition to the SC, the Ambala said it filed for the revocation of HLI’s Stock Distribution Plan, it was also a move for the revocation of the Stock Distribution Option Agreement (SDOA) because the two are essentially one and the same. “When Ambala and the Supervisory Group filed the petition to revoke the SDO of Hacienda Luisita, what they sought to be revoked was not only the SDP but also and most importantly the Memorandum of Agreement which the Supreme Court referred to as the SDOA in its decision.

The MOA/SDOA provided for unequal, unjust and inequitable conditions to the farmworkers. The MOA and its provisions are the evil that brought about the misery of the farmworkers,” the group said.

It was the MOA/SDOA that provided for the distribution of stocks to the farmworkers for a period of thirty (30) years under the ratio 1/30 per year. It is the SDOA which provided for the computation of “mandays” as basis for distribution of shares and which provided for the mechanics of stock distribution to the farmworkers.

Pahilga explained that the Task Force Hacienda Luisita and its terminal report clearly tackled and invalidated the SDOA. The Task Force Luisita said the SDOA contained provisions that are contrary to law and public policy, and should be considered void. He also said the PARC Validation Committee also put in issue the provisions of SDOA and said that it violates the CARL.

“The SDOA is the substance of SDP, and even it violates the CARL,” he said. “There is no reason for the Court to declare that the SDOA was not revoked and that it was only the SDP and PARC resolution approving it that was cancelled. How can the SDOA remain operative when it is the very evil that the farmworkers wanted revoked? It’s quite puzzling how the Supreme Court justices declare it as still valid and binding,” he said.

Pahilga went on to explain that without the corresponding PARC approval and without the SDP, there is no legal basis left to support the SDOA. When the Court affirmed the recall of PARC of its approval of the SDP by canceling/revoking PARC Resolution 89-9-12, the SDP of Hacienda Luisita is also revoked. Consequently and logically, the SDOA, which was embodied in the SDP and which is the “meat” of the SDP so to speak, was also invalidated.

Finally, Ambala said there is no legal basis for the Supreme Court to make the farmworkers choose between actual land distribution or to remain as HLI stockholders.

“The HLI welcomed this decision because it was in accord with the object of its compromise agreement and it gives HLI the opportunity to devise means to suppress the will of the farmworkers to have the lands actually distributed to them,” it said.
Land distribution will not injure the Cojuangcos.

Pahilga in the meantime insisted that here is no undue harshness or injury that would result to HLI in case lands are actually distributed to the farmworkers.

“If HLI will be deprived of its land, it will be entitled to just compensation. The HLI can also have its shares back from the qualified FWBs and be paid just compensation. It would not suffer from any injustice by the application of the law. The decision which orders the farmworkers to choose whether to remain as stockholders of HLI or to opt for land distribution would result to inequity and prejudice to the farmworkers,” he said.

Pahilga clarified that farmworkers petitioned to revoke the SDO of Hacienda Luisita because under the scheme their living conditions worsened.

“They were were not given any dividends. They remained the minority stockholders. They had no control over the use and disposition of the assets of the corporation including the land. They have no say in the corporate business ventures. Their hours of work were dictated by the corporation. In short, they were at the mercy of HLI,” he said.

Pahilga quoted justice Brion who said in his dissenting opinion that “there was no reason to allow the FWBs to remain as stockholders of HLI, ” To remain as stockholders of an almost-bankrupt corporation certainly will not afford the FWBs the “opportunity to enhance their dignity and improve the quality of their lives.”

Justice Sereno, in the meantime, said, “The doctrine of operative facts cannot apply either for two important reasons: (1) it will legitimize the injustice committed to the FWBs when their collective shares were arbitrarily reduced to only 33 percent of petitioner HLI through the undervaluation of the transferred assets; and (2) it will legitimize a second illegal reduction of the shares of the FWBs when more stockholders were added to their collective group. This Court cannot allow them to waive the rights that were granted to them under the social justice clause of the Constitution.”

“It strains reason how qualified FWBs can be allowed the ‘false choice’ of agreeing to a patently illegal SDO scheme, especially when their approval of the SDOA will not even improve their standing in the corporation, but only allowed them to continue being minority stockholders. Qualified FWBS are made even more vulnerable under the voting option, and this vulnerability is underscored by their current economic hardships and their desperate need for immediate financial assistance. They are vulnerable to bribery and might as well vote contrary to their own best interests because of desperation for it,” Pahilga said.

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