FACTS

A complaint was filed against the defendants Eduardo Cojuangco Jr., the ACCRA lawyers, Danilo Ursua
and 71 corporations by the Presidential Commission on Good Government (PCGG) referred here as
“Republic of the Philippines” with regard to a block of San Miguel Corporation (SMC) stock which were
allegedly bought through the CIIF Holding Companies and funded by the coconut levy fund passing
through the Unicom Oil Mills and directly from UCPB.  The coconut levy funds were considered as
government funds since this came from contributions from the coconut farmers with the purpose of
improving and stabilizing the coconut farming industry, however these were said to be privatized under
presidential directives of then Pres. Marcos. Defendant Cojuangco Jr., being close with the Marcoses is
said to have taken undue advantage of his association, influence and connection, embarked upon
different devices and schemes including the use of the ACCRA Lawyers as “nominee shareholders” and
the defendant corporations as fronts to unjustly enrich themselves at the expense of the Filipino people
when he misused the coconut levy fund, amounting to $150 million, to purchase 33 million shares of the
SMC through the holding companies. Hence with the allegations mentioned and with different cases and
issues which remain unresolved, the block of shares representing 20% of the outstanding capital stock of
SMC remained sequestered by the government.

During the pre-trial brief, the Sandiganbayan sought clarification from the parties, particularly the
Republic, on their respective positions, but at the end it found the clarifications "inadequately"
enlightening. To resolve various pending motions and pleadings, Sandiganbayan lifted and declared the
Writs of Sequestration null and void.

Despite the lifting of the writs of sequestration, since the Republic continues to hold a claim on the
shares which is yet to be resolved, it is hereby ordered that the following shall be annotated in the
relevant corporate books of San Miguel Corporation:

(1) any sale, pledge, mortgage or other disposition of any of the shares of the Defendants Eduardo
Cojuangco, et al. shall be subject to the outcome of this case;

(2)  the Republic through the PCGG shall be given twenty (20) days written notice by Defendants
Eduardo Cojuangco, et al. prior to any sale, pledge, mortgage or other disposition of the shares; 

(3)  in the event of sale, mortgage or other disposition of the shares, by the Defendants Cojuangco, et
al., the consideration therefore, whether in cash or in kind, shall be placed in escrow with Land Bank of
the Philippines, subject to disposition only upon further orders of this Court; and 

(4)  any cash dividends that are declared on the shares shall be placed in escrow with the Land Bank of
the Philippines, subject to disposition only upon further orders of this Court.  If in case stock dividends
are declared, the conditions on the sale, pledge, mortgage and other disposition of any of the shares as
above-mentioned in conditions 1, 2 and 3, shall likewise apply.

Sandiganbayan denied both Motion for Reconsideration and Motion for Modification but eventually
reduced its resolution deleting the last 2 provisions. Cojuangco, et al. filed a Motion for Authority to Sell
San Miguel Corporation (SMC) shares, praying for leave to allow the sale of SMC shares and
Sandiganbayan granted the motion. Cojuangco, et al. later rendered a complete accounting of the
proceeds from the sale of the Cojuangco block of shares of SMC stock, informing that a total amount of
P 4,786,107,428.34 had been paid to the UCPB as loan repayment.

ISSUE

Whether or not Sandiganbayan has committed grave abuse of dicretion in:

(a) in lifting the Writ of Sequestrations on the sequestered SMC shares.

 (c) in deleting the last two conditions the Sandiganbayan had earlier imposed on the subject shares of
stock.

RULING

Among the WOS issued, only one writ WOS 87-0218 complied with PCGG Rules and Regulations
requirement that the issuance be made by at least two Commissioners. However, even if Writ of
Sequestration No. 87-0218 complied with the requirement that the same be issued by at least two
Commissioners, the records fail to show that it was issued with factual basis or with factual foundation.
It is the absence of a prima facie basis for the issuance of a writ of sequestration and not the lack of
authority of two (2) Commissioners which renders the said writ void ab initio.  Thus, being the case, Writ
of Sequestration No. 87-0218 must be automatically lifted. Consequently, the writs of sequestration nos.
86-0062, 86-0069, 86-0085, 86-0095, 86-0096, 86-0097 and 86-0098 must be lifted for not having
complied with the pertinent provisions of the PCGG Rules and Regulations, all of which were issued by
only one Commissioner.

Nor did the Sandiganbayan gravely abuse its discretion in reducing from four to only two the conditions
imposed for the lifting of the WOS. The Sandiganbayan thereby acted with the best of intentions, being
all too aware that the claim of the Republic to the sequestered assets and properties might be
prejudiced or harmed pendente lite unless the protective conditions were annotated in the corporate
books of SMC. Moreover, the issue became academic following theSandiganbayan’s promulgation of its
decision dismissing the Republic's Amended Complaint, which thereby removed the stated reason - "the
Republic continues to hold a claim on the shares which is yet to be resolved" - underlying the need for
the annotation of the conditions (whether four or two).