The majority faction of the Lopez family on Friday demanded that Lopez Inc. President Federico “Piki” Lopez and the First Gen Corporation board justify a controversial energy deal with Prime Infrastructure.
The group questioned why First Gen agreed to fund nearly the entirety of Prime Infra’s hydropower ventures while securing only a 33% minority stake.
According to the family faction, Prime Infra was fully reimbursed for its development costs and benefited from a massive original premium of ₱50 billion. That premium now stands at ₱42 billion after First Gen cut its project stake down from 40% to 33%.
The majority claimed that despite the reduced stake, Prime Infra only needs to shell out a net total of roughly ₱625 million for the ₱62-billion project. This equates to a 1% financial contribution in exchange for a 67% share of the profits.
“Piki went all in with First Gen’s money all for the pittance of keeping his job. He and the board must explain why they failed to protect First Gen and agreed to pay ₱42 billion, or a 200% premium”, the family said, adding that the deal was discussed hastily with no advance information given to the board.
The family further criticized the corporate governance behind the transaction, alleging that the complex multi-billion-peso deal was rushed through a single one-hour board discussion without giving independent directors adequate time to review it.
“How can a corporation, a listed one at that, be made to pay billions of pesos and be potentially in default for the job of one man and at the expense of hundreds of thousands of investors? No man’s job security is higher than the interest of a listed company anywhere in the world,” it added.
The opposing family members raised concerns that First Gen is bearing all structural risks without standard contractual safeguards, noting that the agreement lacks a negotiated price adjustment mechanism typical of major investment deals.
Responding to the allegations, First Gen previously stated that the company only commits to business transactions that have undergone thorough and proper scrutiny by its board of directors.