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GIGI FIGHTS TAKEOVER BID

By: Ador Vincent S. Mayol, Eileen G. Mangubat July 14,2015 - 12:25 AM

bantay radyo

‘Bantay Radyo network can’t go to the Garcias so easily’

With elections less than a year away, owning an AM radio station is a valuable asset to acquire— or painful to lose.

Especially if you lose it to potential political opponents.

A pending takeover of the management of three AM stations under El Nuevo Bantay Radyo on August 1  has prompted the filing of a civil case by Cebu Provincial Board Grecilda “Gigi” Sanchez-Zaballero.

BACKSTORY: Sanchez may lose Bantay Radyo

Zaballero  is president of PAFI (The Sower of Seeds) Foundation, which has held the management contract to run the  network since 2002—until an unexpected turn of events made her see red.

After being “verbally” assured of a third contract extension following a meeting with franchise holders in Cagayan de Oro City in March and paying a deposit of P700,000, Sanchez said in her complaint that she was “shocked” to get a letter informing her that the contract for management and operation would go to Cebu Capitol-based CFI Cooperative after the contract expires on July 31.

PAFI Foundation represented by Zaballero filed a civil case last Friday asking the court’s intervention to stop the network’s turnover to the cooperative, which is identified with the Garcia clan, her political opponents.

Capitol CFI Cooperative, one of the biggest coops in the Visayas, was founded 45 years ago by retired judge Esperanza Garcia who still leads it as chairman of the board.

GARCIA ADVANTAGE

The enmity with the Garcias came to the fore in the 2010 election, when Gigi’s father, the late Vice Gov. Gregorio Sanchez Jr., ran under the banner of the Liberal Party with Hilario Davide III, who lost his first run for the governorship.

READ: Sanchez family wants court action on Bantay Radyo case | CFI to take over Bantay Radyo |

The complaint for specific performance and damages was filed in the Cebu City Regional Trial Court against Sarraga Integrated and Management Corp. (SIAM) represented by president

Francisco B. Sarraga, a businessman in Cagayan de Oro City.

SIAM holds the franchise granted by Congress to build and operate the commercial broadcast stations. It has three AM radio stations: dyDD based in Cebu City, dyHH based in Bogo  City and dyZZ based in Bacolod City.

The network’s main broadcast comes from the Cebu city station with programs simultaneously aired over the other two. The broadcasts can be heard all over Cebu, Negros Oriental, as well as in Leyte and Samar.

“I was aware the Garcias were interested in the radio stations.  But I’m just one person holding on.  There are nine of them in politics,” Zaballero told Cebu Daily News last night.

She counted them off:  former Rep. Pablo Garcia, 3rd district Rep. Gwen Garcia, her daughter Cristina who may be running for Liloan mayor next year and husband Liloan Mayor Duke Frasco.

Siblings of Gwen include Dumanjug Mayor Nelson Garcia, Marlon Garcia, former congressman Pablo John Garcia, former Capitol consultant  Byron Garcia and Winston Garcia who is allegedly eyeing a congressional seat in the newly created 7th district in south Cebu.

Asked if she  raised this potential strategic loss in campaign leverage to Governor Davide, Cebu province chairman of  the Liberal Party,  Zaballero said she has discussed it, but declined to elaborate.

“The network shouldn’t go to the Garcias that easily,” she said.

DAMAGE CLAIM

The complaint prepared by laywer Magnificus Cañete asked the court to stop SIAM from going ahead with the transfer of management “to anybody” and to order SIAM to sign a renewal of the management agreement on the terms earlier contained in the draft.

It also sought the payment of P500,000 in moral damages with attorneys’ fees and litigation costs of P100,000.

If SIAM cancels its management contract with PAFI Foundation, said Zaballero, the Cebu company would suffer “enormous damage” and “will be exposed to multiple litigations from current advertisers and block time patrons.”

She said the foundation had already entered into agreements with third parties for the purchase of radio block time and other similar arrangements.  She didn’t identify the parties.

She said she also feared that several current employees of El Nuevo Bantay Radyo will be displaced due to the “sudden and ill-advised” decision of SIAM not to renew its contract with PAFI Foundation.

The network was granted a franchise by Congress under Republic Act NO. 7478 approved in May 5, 1992.

In Dec. 2 of the same year, both parties sealed a management agreement for PAFI Foundation, the brainchild of then Cebu Vice Gov. Gregorio Sanchez Jr., to run the three radio station with SIAM entitled to  a guaranteed monthly income.

The three-year agreement was renewed in 2005 for five years until July 31,  2010, then another five years until July 31, 2015.

Zaballaero said that she deposited P700,000 in SIAM’s account as initial payment for the renewal of the contract with the broadcast company as agreed when she went to Cagayan de Oro City with Edgar Zaballero and Yody Sanchez to meet with SIAM representatives Luis Sarraga and John Sarraga to confirm the agreement to renew the management contract.

The complaint said PAFI Foundation “is entitled to have a renewal of the  subject management agreement because all the terms and conditions are already agreed upon, and what is left to be done is the formal signing of the new Management Contract.”

They asked the court to issue a temporary restraining order and to make it permanent later with an injunction order.

COOP TO WAIT

Sought for comment yesterday, lawyer Lito Astillero, a member of the board of directors of Cebu CFI Cooperative Inc, said they will just wait for the court’s decision.

“Well, we couldn’t comment much about that because Cebu CFI was not impleaded in the case. We’ll just wait for any development,” he told CDN over the phone.

“What I am sure of is that the contract or ‘Management Agreement’ between SIAM and Cebu CFI was already signed sometime a month ago,” Astillero added.

In an earlier interview, he said the coop would use the stations to promote its education program for members.

The Capitol CFI Coop has 90,000 members and around P9 billion in assets.

The complaint said the Sanchez  family foundation invested millions of pesos to build additional transmitters to enhance radio signals of the network.

They also leased land in the cities of Cebu and Bogo, and in Guihulngan City in Negros Oriental to house the radio transmitters.

It said PAFI Foundation was able to fulfill its obligations to SIAM “despite financial difficulties and daunting challenges, occasioned by the untimely death of the then chairman of the Board (Pafi

Foundation), Engr. Greg Sanchez. Jr; the occurrence of super typhoon Yolanda that severely damaged the properties of the radio station, and the stiff competition prevailing in the broadcast industry.”

Discussions for contract renewal were held in December 2014 which included a new set of mutual obligations and undertakings that would be incorporated in the new Management Contract.

Three months after, Sanchez and two relatives went to Cagayan de Oro City to meet with SIAM representatives.

During the meeting, the Sarragas agreed “verbally” to renew the Management Contract with Pafi Foundation and to sign it in June 2015, a month before the expiry date.

The complaint said there was a meeting of the minds and that representatives “shook hands”  to seal the deal.

During the meeting, the Sarragas reportedly directed the Sanchez  to deposit to SIAM’s account the amount stipulated in the new Management Agreement.  The amount of P700,000 was deposited on April 10, 2015 as initial payment for the contract renewal as agreed.

Assured of a new contract, PAFI Foundation entered into certain agreements for radio block time as well as advertisements.

However, when she came back from a trip to the United States, Sanchez said she was shocked to get a letter from SIAM that it would no longer renew its contract and would instead sign up with  Cebu CFI Cooperative Inc.

Sanchez said she tried to contact SIAM representatives to convince them to honor their commitment since what was left to be done was only  a formal signing of the contract, but the effort to convince them to renew “proved futile.”

She said SIAM insisted on giving the management and operation of three radio station to Cebu CFI despite the fact that SIAM had already received the initial payment.

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