Lopez family's 71% majority accuses Piki of 'poison pills' to cling to power

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MANILA, Philippines — Twelve members of the Lopez family have released a statement accusing their cousin Federico "Piki" Lopez of breaching his duties as corporate officer by allegedly inserting contract clauses worth P24 billion that shield him from removal. 

The statement released Monday, April 27, titled "A Matter of Trust and Governance," is the first time the majority shareholders of Lopez Inc. have publicly spoken under their own names rather than through lawyers. It was signed by members from three family branches that together control 71% of the holding company at the apex of the Lopez conglomerate. 

"Over time, we've lost our trust and confidence in our cousin, Piki Lopez," the signatories wrote. They added: "This matter should have stayed private. But Piki chose to make it public."

What the statement says

The 12 family members laid out two central accusations tied to the decisions made by Piki that they say led to a loss of trust.

First, they said Piki excluded them from two major transactions involving First Gen Corp., the family's power arm where he serves as chairman and CEO. 

They said they were not consulted about the P50-billion sale of 60% of First Gen's natural gas business to Enrique Razon Jr.'s Prime Infrastructure in November. Nor, they said, were they told about First Gen's acquisition of a 33% stake in Prime Infra's hydropower business for P62 billion this April.

Being shut out of decisions of that magnitude, they said, amounted to "a clear failure in Piki's fiduciary responsibility and a circumvention of corporate governance."

Second, they said they discovered two "poison pill" provisions embedded in those deals. If Piki and his designates are removed from their management roles, the statement said, First Gen would pay Prime P24 billion and allow Prime to buy out First Gen from both the gas and hydropower agreements at a 25-percent discount.

The effect, the signatories wrote, was that Piki "secured his position as chairman and CEO and secured management control of the company, effectively making him indispensable because the cost of removing him, even for non-performance, would be too great."

"Piki's fiduciary duty mandated him to place the interests of the beneficial owners above his own. This was not the case. Piki's interests superseded those of his shareholders," the statement read.

Piki's camp has reportedly maintained that the real trigger for his ouster was his refusal to put P2 billion in Lopez Inc. reserve funds to ABS-CBN, the family's media business, which has struggled financially since losing its broadcast franchise in 2020. The majority has denied this. 

First Gen, in earlier statements and stock exchange disclosures, has said all its contracts and agreements are entered into only after review and approval by its board of directors.  

Piki filed a complaint with the Mandaluyong Regional Trial Court in March, calling his ouster illegal. The court granted a writ of preliminary injunction on March 16, blocking the board's Feb. 27 resolution removing him and barring his proposed replacement, Rafael Lopez, from assuming the presidency.

The majority's lawyers have filed a motion to dissolve that injunction. 

Signatories of April 27 joint statement

The signatories include Eugenio L. Lopez III, Rafael L. Lopez, Manuel L. Lopez Jr., Martin L. Lopez, Miguel L. Lopez, Maria Eugenia Psinakis Brown, and Ernesto Miguel L. Lopez.

Also signing were family members Maria Cristina Rosario Lopez Grassi, Roberta Pilar Lopez Feliciano, Maria Margarita Lopez Lichauco, Michael Lopez Psinakis, and Ramon Javier L. Lopez

The statement says they have one concession for Piki: ""To be clear, he will remain a board member — just not as president. Our only motive has been to do the right thing. It has never been to rob any one individual of their future or reputation."

The Lopez group — whose interests span power generation through First Gen, property through Rockwell Land, and media through ABS-CBN — is one of the Philippines' oldest business dynasties.

The family rebuilt their empire after the Marcos dictatorship seized their assets in 1972, and ABS-CBN returned after the 1986 People Power Revolution. The network grew into the country's dominant broadcaster before losing its franchise in 2020 under former President Rodrigo Duterte. — Cristina Chi