[Vantage Point] Companions in power: When Ramon Ang goes up against Ramon Ang

Ramon S. Ang's 25.68% stake in Lopez Inc. raises corporate governance concerns, particularly regarding potential conflicts of interest between his roles as an independent investor and as CEO of San Miguel Corp. Ang's investment gives him significant economic exposure to First Gen Corporation, creating a scenario where both companies could compete for the same energy projects, raising questions about governance and fiduciary duties. The situation underscores the importance of disclosure and recusal in corporate governance, as Ang's dual interests could lead to conflicts when both companies pursue similar business opportunities. This is AI-generated. Read the article for full context. Report any errors. There is nothing inherently wrong with Ramon S. Ang investing his own money. But his 25.68% stake in Lopez Inc. creates a corporate-governance question that has attracted surprisingly little attention: where does Ramon Ang, the independent private investor, leave off and Ramon Ang, the chairman and chief executive of San Miguel Corp. (SMC), step in? His personal investment is not necessarily a conflict of interest. But there are enough red lights to make the longer answer important. Ang acquired the stake through his wholly owned investment vehicle Illumina Investment Holdings Inc. SMC did not buy the shares, and even clarified in an official disclosure to the Philippine Stock Exchange (PSE) that Ang had acted in his personal capacity. That is an important distinction, but it does not resolve potential conflicts. Consider the numbers. Lopez Inc. owns 54.74% of Lopez Holdings, which owns 60.67% of First Philippine Holdings (FPH). FPH, in turn, owns 67.84% of First Gen Corporation (First Gen)’s common shares. Trace Ang’s 25.68% through those ownership layers and you will see that he has roughly 5.79% look-through economic exposure to First Gen. That is not a direct holding or voting right. But Ang now has a personal economic interest in one of the biggest power groups in the Philippines, while continuing to head another conglomerate that dominates much of the same industry. The Energy Regulatory Commission (ERC)’s numbers make that overlap difficult to brush aside. At end-2024, SMC accounted for 6,079.6 megawatts (MW) of attributable installed generating capacity, or 22.44% of the national total — the country’s largest share. First Gen ranked third with 3,583 MW, or 13.22%. These are not two companies that may eventually collide in the same line of business. They already inhabit the same electricity market. They may compete for power plants, renewable-energy projects, liquefied natural gas (LNG) and other fuel contracts, electricity customers, financing, and government-awarded energy opportunities. This is where the conflict becomes real. (READ: ERC scrutiny adds a new wrinkle to Ramon Ang’s Lopez, Inc investment) The many what ifs What if an attractive generating asset is offered for sale and First Gen wants it as badly as San Miguel? Suppose they pursue the same hydropower project or power-supply contract. Imagine commercially sensitive information obtained from one side potentially giving an advantage to the other. Which Ramon Ang would then show up? Philippine corporation law anticipated this problem. Section 30 of the Revised Corporation Code addresses directors who acquire personal or pecuniary interests that conflict with their duties. Section 33 goes further: when a director, by virtue of his office, takes for himself a business opportunity that should belong to the corporation and profits at its expense, he must account for those profits, unless stockholders representing at least two-thirds of outstanding capital stock ratify the act. The law contains an especially relevant qualification: the corporate-opportunity rule applies even when the director risked his own funds. Caveat: this does not mean that Ang breached either provision by buying into Lopez Inc. There is no evidence that SMC wanted Crème Investment Corp.’s 25.68% stake, that the opportunity was first offered to San Miguel, or that Ang diverted an SMC opportunity into Illumina. It would be a step too far to call the acquisition itself unlawful. Ang’s Lopez stake carries an implied value of roughly P11.56 billion based on his P45-billion valuation of Lopez Inc. Piki Lopez has described him not merely as an investor but as a “partner” whose expertise could help grow Lopez businesses. Why governance matters The corporate relationships are meanwhile becoming more intertwined. ABS-CBN is raising P6 billion in fresh equity, including P3.5 billion from I&C Holdings Corp., a newly incorporated investment company formed by senior bankers associated with Fortman Cline Capital Markets. Fortman Cline is hardly a stranger to San Miguel. Its published transaction history shows it advised SMC on acquisitions that helped transform the conglomerate into a major power and infrastructure player, including transactions involving Meralco, Sual, San Roque, Ilijan and, more recently, the NAIA concession. None of this establishes that Ang owns, finances or controls I&C. There is presently no documentary evidence that he does. But it illustrates how closely Philippine corporate circles can intersect — and why governance matters as personal investments, advisory relationships and corporate partnerships overlap. Does that mean Lopez companies should now avoid businesses where San Miguel operates? No. That would effectively create a private non-compete zone around SMC. First Gen should not abandon a project merely because San Miguel wants it. The governance burden falls principally on Ang and the decision-making process. Disclosure and recusal When interests collide, disclosure and recusal become essential. Confidential information cannot travel from one side to benefit another, and an opportunity properly belonging to SMC cannot be redirected toward an enterprise in which Ang has a personal financial interest. The problem could also run in reverse. We still do not know what governance rights accompany Illumina’s 25.68% Lopez Inc. stake. If Ang or his nominees obtain board seats, veto rights or direct participation in strategic decisions, fiduciary obligations could arise on both sides. That is why the next crucial disclosure is not another percentage. It is governance. And there is one coincidence worth putting on the table. On August 3, before I&C emerged publicly, the market was abuzz with speculations that an Ang-led investor group was preparing to inject P3.5 billion into ABS-CBN for a 39% economic interest. ABS-CBN subsequently denied that Ang and Manuel V. Pangilinan were negotiating to take over management. Eleven days later, the disclosed transaction involves I&C investing exactly P3.5 billion for what our calculations suggest could become roughly 38% of enlarged ABS-CBN. The numbers are remarkably close. But coincidence is not evidence. Nothing disclosed so far establishes that Ang owns, finances or controls I&C. The parallel is nevertheless difficult enough to ignore — and important enough for investors to keep watching. None of this presumes wrongdoing. Good governance exists precisely because legitimate business interests sometimes collide. The scale makes complacency difficult. SMC held 22.44% of attributable national installed generating capacity at end-2024; First Gen had 13.22%. Between them sits Ramon Ang—SMC chairman and CEO on one side and, through Illumina, owner of 25.68% of the holding company above the other. Those interests can coexist. The test comes when they want the same thing. And when that day arrives, the question will no longer be whether Ramon Ang bought his Lopez stake with his own money. It will be which Ramon Ang has the fiduciary duty to step away. I welcome your views on these and other issues where decisions made in power shape the country’s economic future. Below are some Vantage Point pieces you might have missed: Click here for more Vantage Point articles.