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Wednesday, February 08, 2006

Ex-Smart exec joins Salim rival; PLDT's legal mess

MANILA STANDARD--The telecom executive who virtually created and made Smart Communications Inc. the premier mobile phone company in the Philippines is now in Indonesia. Anastacio "Boy" R. Martirez, former head of personal communications and mobile services division of Smart, has joined Indonesia's Sinar Mas Group, a company owned by the powerful Wijaya family.

The grapevine said Sinar Mas offered Martirez, popularly known in Smart as ARM, a $10 million package to head Mobile-8, an upstart mobile phone firm bought by the Wijaya family from PT Bimantara Citra, formerly owned and controlled by ex-president Suharto's son, Bambang Trihatmodjo. Sinar Mas offered the job to ARM long before he was fired in late November when he thought of wresting the Smart presidency from Napoleon "Polly" Nazareno.

The grapevine said the Sinar Mas offer was one key factor that emboldened ARM to openly challenge Polly and vie for the latter's post. ARM's plans at that time were not kept secret from key executives of Smart, including Polly and Manuel "Manny" Pangilinan, chairman of PLDT and popularly known as MVP.

It will be recalled that Polly and ARM, had differences in management style that was adversely effecting the programs and operations of the company. Polly, Smart's chief executive officer, gave instructions to ARM to implement certain marketing programs but ARM saw things differently and did not heed his chief's order. To make the story short, MVP realized that ARM had become more of a liability than an asset to the group and was left with no choice but to let go of the executive, one of his favorites in the company.

Indonesia connections
ARM may have lost the battle with Polly but he came out richer following a "golden handshake fee" of $4.5 million (P245 million) from Smart. ARM, in addition, had thought he had nothing to lose in his war with Polly because of the $10 million offer from Sinar Mas. He was also offered by MVP the top plum in Del Monte Pacific, which was eyed by the First Pacific group before it eventually lost to the tandem of San Miguel Corp. and Joselito "Butch" Campos.

The Sinar Mas job, meanwhile, has pitted ARM against his former boss, the Salim family, who owns the First Pacific group that, in turn, owns a quarter of Philippine Long Distance Telephone Co. (PLDT), Smart's parent company. Sinar Mas was once the second largest business group in Indonesia. It is involved in almost all areas of finance, from insurance and securities to company finance and compete directly with the interests of the Salim family.

Mobile-8 is 70.52 percent controlled by Simar Mas after acquiring it from publicly listed PT Bimantara Citra. The rest of the shares are divided among Bimantara subsidiary PT Centralindo Panca Sakti, with 9.54 percent, Asialink (8.5 percent), and a consortium of Qualcomm Inc. and Samsung Electronics of South Korea.

Dire implications
The Supreme Court (SC) decision declaring as "ill-gotten" a large block of PLDT shares owned by the late Don Ramon Cojuangco may have serious implications on all the common stocks of the telecom giant. Legal experts argued that if the SC rules with finality that those shares are indeed ill-gotten, the very PLDT shares which First Pacific currently holds could also be questioned.

"They could also be interpreted as part of the ill-gotten wealth of the Marcoses. The reason is that those contested shares and the PLDT shares currently held by First Pacific belongs to the same tree. These are the same shares, which the late businessman Ramon Cojuangco had acquired from American company GTE," a legal expert said.

"Who can stop a person, or interested party, to ask the court to declare relief that the PLDT shares of First Pacific are also tainted and part of the ill-gotten wealth of the Marcoses?"

The grapevine said certain interested parties and their lawyers are now planning this course of action.

Manila Standard.
February 08, 2006

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