Fight for control roils Manila Electric meeting
MANILA, May 27 (Reuters) - A battle for control of the Philippines' largest power utility deepened on Tuesday when the state pension fund tried to stop the re-election of Manila Electric Co's (Meralco) (MER.PS) board.
The pension fund, GSIS, which owns around 25 percent of Meralco, won an order from the Securities and Exchange Commission to prevent votes cast in favour of some board members from being counted at Meralco's annual meeting in Manila.
"They have a valid complaint lodged with the SEC challenging the proxies solicited by certain members," Hubert Guevara, a director of compliance and enforcement at the SEC, told reporters.
The shareholders' meeting will continue, but it was not clear if a vote calling for the board's re-election will push through.
"This is the last recourse to stop the election," said Oscar Lopez, chairman of First Philippine Holdings Corp (FPH.PS).
Meralco is controlled by the Lopez family, which also owns two power generation plants and geothermal firm PNOC EDC (EDC.PS), as well as the country's biggest media firm, ABS-CBN Broadcasting Corp (ABS.PS). The Lopez family owns about one-third of Meralco.
Critics say Meralco buys power at high rates from Lopez-owned generating firms and does not do enough to prevent illegal tapping of electricity, the cost of which is passed on to consumers.
Winston Garcia, the head of GSIS, has led a campaign against the Lopez family's management of Meralco.
Some analysts and commentators say Philippine President Gloria Macapagal Arroyo instigated the GSIS campaign to lower power rates and appease business groups and customers facing rising bills for everything from rice to fuel.
But palace officials and Garcia have denied any government involvement in the fight with the Lopez's.
Philippine electricity rates are among the highest in Asia due to expensive deals with private power producers, the country's reliance on imported oil to generate electricity and widespread illegal tapping.
Meralco says it has to pay high prices for power bought from all generating firms, including those belonging to state-run National Power Corp, whose ageing facilities mean it costs more to produce energy. (Reporting by Karen Lema; Editing by Carmel Crimmins & Ian Geoghegan)
