Gozon seeks truce, but will keep Ang’s P1 billion

By Luis Leoncio

GMA Network Inc. President and CEO Felipe Gozon sought a truce in the raging word war with San Miguel Corp. (SMC) CEO Ramon Ang through a “reasonable settlement,” which Gozon said he will be willing to consider.

Gozon, however, insisted that he will not surrender Ang’s P1-billion downpayment on the botched deal, insisting that Ang did not negotiate in good faith.

The dispute was triggered by an aborted deal for Ang to buy a minority stake in the broadcast network.

In a statement, Ang said the refusal of the group of Gozon to return the P1-billion advance payment only reinforces the unbailable syndicated estafa case he filed against the group.

“Unwittingly by his own admission, Atty. Gozon has reinforced my complaint for estafa,” Ang said in a statement.

“He received the P1 billion for the Gozon group and in trust for Duavit and Jimenez groups. Yet, notwithstanding the directive of the Duavit and the Jimenez groups, he still refuses to return the money or any portion thereof and instead appropriated the entire P1 billion all for his own and for the Gozon group,” his statement read.

In a complaint filed with the Department of Justice last July 27, Ang accused Gozon and his other nine associates who holds a majority stake in GMA Network of committing syndicated estafa.

The complaint said the Gozons never returned his P1 billion ($21.84-million) downpayment for his planned purchase of 34 percent of GMA Network’s shares despite an agreement stipulating a return of the money should negotiations eventually fail.

Gozon in a statement admitted the P1 billion remains in his custody but said that it has been deposited with a reputable universal bank and is considered compensation to answer for the damages that the Gozon Group has sustained as a resut of Ang’s “violation of his obligation to negotiate in good faith, to execute and conclude the Transaction Documents, and close the Transaction pursuant to the Term Sheet dated June 23, 2014 among the parties.”

Gozon cited as bases for the retention of Ang’s downpayment the Gozon Group’s right of retention under the Term Sheet (Item 8, third bullet point) of the agreement with Ang and the Civil Code of the Philippines.

“As a consequence of Mr. Ang’s violation of his obligations in law and in contract, the Gozon group has reserved its remedies,” Gozon said. He then recounted how the P1 billion downpayment came about.

He said sometime in late December 2013, Ang commenced talks with Mr. Menardo R. Jimenez and himself for the purchase of 34 percent of the outstanding capital stock of GMA Network.

Ang offered to make a downpayment of P1 billion but as Gozon was about to leave for a vacation then, he advised Ang that he would consider the matter after he returns from his trip.

After Gozon’s return from his trip abroad, he accepted the P1 billion offered by Ang. Gozon said a Letter of Intent and Confidentiality Agreement were signed and exchanged on January 20, 2014.

Gozon added on February 26, 2014, or even before the Term Sheet was signed by the parties on June 23, 2014, Ang tendered to Gozon a manager’s check for P1 billion, which the latter accepted. “In a letter dated February 26, 2014, Ang confirmed the money paid as downpayment for the Transaction and the acceptance,” Gozon said.

Gozon said his group did not defraud Ang. “Neither did they misappropriate any ‘money contributed by stockholders, or members of rural banks, cooperative, ‘samahang nayon(s)’, or farmers association, or of funds solicited by corporations/associations from the general public’, an element of syndicated estafa,” he added.

Ang dealt with the Gozon Group and the Jimenez Group throughout the negotiations with a full complement of lawyers (external and internal) and financial advisors (at least two of them from San Miguel Corp), Gozon said.

“He freely signed the Term Sheet on June 23, 2014. His lawyers and financial advisors conducted due diligence on the company for several months after the signing of the Term Sheet, and negotiated each and every provision in the Share Purchase Agreement,” he added.

Gozon said in December 2014 and last January, he requested Ang for a face to face final meeting to thresh out the remaining issues that the parties’ advisors could not agree on “but Ang did not accept the request.”

He said Ang’s advisors sent last February 27 their proposals on all the remaining open issues on the Share Purchase Agreement.

“However, in an e-mail of March 20, 2015, Ang informed the Gozon Group and the Jimenez Group that the funding support to him had been withdrawn claiming the long-drawn negotiations, and that he needed to reassess the transaction,” Gozon said.

He added after the Gozon Group and the Jimenez Group had agreed to all of the remaining proposals of Ang as sent by his advisors on February 27, 2015 which agreement was conveyed in the Gozon and Jimenez Group’s counsel’s email on March 21, 2015, Ang informed them in an email of March 26, 2015 that he will not proceed with the transaction raising certain issues about the company and called their attention to his email of March 20, 2015 on the withdrawal of the funding support to him.

“The P1 billion is intact and has not been used. The Gozon Group has the right to retain it to answer for its claims for damages against Ang, among others, for opportunity loss, pursuant to law and the Term Sheet, as Ang prevented the Transaction from conclusion and closing, by his unilateral decision not to proceed with the Transaction and his imposition of new conditions after the purchase contract was perfected on March 21, 2015,” Gozon said.

“As there is a valid and just reason for the retention of the Downpayment, there is no estafa,” he added.

Ang’s estafa case did not include the Jimenez Group which Gozon said he recognized the “special relations” of Ang with the Jimenez and Duavit groups in GMA Network.

“In several meetings among the Gozon Group represented by me, the Jimenez Group represented by Joel Marcelo Jimenez and the Duavit Group represented by Gilberto Duavit Jr., in the presence of their financial and legal advisors, they discussed the legal consequences of Ang’s unilateral decision not to proceed with the Transaction as well as the remedies available to them.”

“While they agree with the letters of to the counsel of Ang, the Jimenez Group and Duavit Group have waived their rights and interests over their shares in the downpayment, have expressed willingness to return such shares that may be due them, and did not want to participate in any dispute or litigation over the downpayment,” Gozon said.

Gozon added he understands their special relationships with Ang.

In making the decision to retain the downpayment, Gozon said “he did not consult with the other members of the Gozon Group. The said other members had no participation in the said decision.”