ANALYSTS have flagged rising uncertainty for Lopez group companies following the ouster of Federico “Piki” Lopez as head of the family’s holding firm, warning that the dispute between cousins could weigh on investor sentiment and delay key strategic decisions.
Lopez was removed as president and chief executive of Lopez Inc. in February, with family members accounting for 71 percent of the holding firm’s shares citing “loss of trust and confidence” over alleged mismanagement and questionable transactions.
Piki Lopez, who reportedly had blocked moves by cousin Eugenio “Gabby” Lopez to use proceeds from several power deals to prop up ABS-CBN Corp., has gotten a court to issue an injunction against his ouster.
Gabby Lopez used to run ABS-CBN while Piki Lopez is chairman and CEO of First Gen Corp., which recently sold its gas assets to tycoon Enrique Razon.
“This is shaping up to be the country’s biggest boardroom battle as it involves a storied business empire that controls hundreds of billions in assets,” said Juan Paolo Colet, managing director at Chinabank Capital Corp.
While the conflict for now has not led to disruptions of firms under the Lopez banner, Colet said “certain major decisions, especially around strategy and capital management, might be at risk of being put on hold.”
He added that any delay in a potential capital infusion into ABS-CBN, previously the Lopezes’ crown jewel before it lost its franchise during the Duterte administration, could affect its turnaround plans.
Meanwhile, issues tied to transactions at First Gen — Gabby Lopez’s camp claims that Piki Lopez has blocked attempts to audit the company — may raise concerns over transparency and corporate governance.
Manny Ocampo, president and chief operating officer at Investment and Capital Corp. of the Philippines (ICCP), said the infighting was weighing on investor confidence.
“Investors don’t like the in-fighting among family members which ultimately might impact the performance of the companies under the group. This ultimately causes uncertainties that investors don’t like,” he said.
Among others, the side that ousted Piki Lopez has yet to present a clear reform agenda, Ocampo said, adding that the “claims of mismanagement should also be well-documented.”
“The whole fight is becoming a trial by publicity,” he noted.
“Shareholders of the affected listed companies are getting affected by such in-fighting and may just ultimately cycle out,” Ocampo continued.
First Gen shares closed up 2.8 percent to P18.38 apiece on Wednesday ahead of a Holy Week break while those of ABS-CBN fell by 0.85 percent to P3.50 apiece.
