ALAMEDA, Calif. (National Youth Movement for the West Philippine Sea) — California Attorney General Rob Bonta met with a group of concerned Filipino Americans on April 21, 2023 to discuss shareholder complaints against the California-based Chevron Corporation.
Loida Nicolas Lewis of New York and national chair of U.S. Filipinos for Good Governance, met with Bonta after she was allegedly stonewalled by Chevron Corporation when she and other shareholders sought documents regarding the sale of Chevron’s 45% interest in the Malampaya gas fields in the Philippines to Dennis Uy, a favored crony of former Philippine President Rodrigo Duterte, for a fraction of its value.
Chevron’s interests in the Malampaya gas fields were estimated to be worth several billions of dollars, but Chevron reported to its shareholders in their 2020 Annual Report, that it sold the company’s shares for $565 million. The Philippine Senate Committee on Energy investigated the alleged anomalies in the deal, with subsequent testimonies by officials of the Philippine Department of Energy disclosing that the actual amount that the buyer paid to Chevron was $400 million only.
“As a certified shareholder of Chevron Corporation, I find the discrepancies in the amounts are staggering. Since last year, I have been asking Chevron to provide me with documents about the Malampaya transaction to determine if Chevron lied to us, its shareholders, about the sale,” Lewis said. “Since they have not given a substantive response, I felt compelled to ask for help from the State of California.”
Other leaders of the Filipino American community were also in the meeting with AG Bonta.
One of them, Rodel Rodis, a member of the California state bar and former president of the San Francisco Public Utilities Commission, asked Chevron for an explanation about the discrepancies in Chevron’s reports.
In October 2021, Lewis and Rodis filed a complaint with the Office of the Ombudsman of the Philippines, against former Energy Secretary Alfonso Cusi, Dennis Uy, and several Chevron officials involved in the controversial sale.
In February 2022, the Philippine Senate adopted a a resolution recommending the filing of charges against former Energy Secretary Cusi and other officials because, according to the Senate findings, the approval of the transaction between Chevron and UC Malampaya owned by Dennis Uy was indeed anomalous and disadvantageous to the Philippine government and its people.
“As concerned citizens, we raised this issue to the U.S. Securities and Exchange Commission, because Chevron claims it had disposed of its interests in the Philippines (referring to their Malampaya shares),” said Rodis. “However, during the hearing conducted by the Philippine Senate Committee on Energy, officials of the Philippine Department of Energy asserted that Chevron’s deal with Udenna did not involve any transfer of rights. So what was the real deal then? Did Chevron lie in their reports, or did the Philippine government?” Rodis asked.
AG Bonta, for his part, said, “Chevron is indeed based in California, so I will have my office look into this case as soon as possible.”
Chevron’s possible violations
According to Lewis and Rodel, Chevron may have possibly violated Federal Securities Laws. As it is a publicly traded company subject to regulation by the U.S. SEC, Chevron is required to be truthful in its representations and dealings with its shareholders.
If it has misrepresented the purchase price of the transaction, then it has misled its investors and committed possible securities fraud. If proven that the misrepresentation was intentional and reckless, Chevron has thus harmed its shareholders as a result of its misrepresentations.
Remedies to the violations include voiding the transaction, and returning shareholders’ values to the status quo preceding the transaction. Chevron should also be required to adhere to its obligations of offering the Philippine government the right of first refusal according to the tripartite agreement between Chevron, Shell, and the Philippine government.
Should Chevron be found guilty also of breach of contract and fair dealing, as well as breach of fiduciary duties, they will be held liable and accountable to their shareholders, and the public, for any damages arising out of these breaches.
“The Filipino people are losing 50 million pesos [$900,000] every day because of this disadvantageous deal that Chevron and Mr. Uy conducted,” Lewis said. “This goes beyond just shareholders, this affects the public, too. To put it simply, we want Chevron to return what rightfully belongs to the Filipino people.”
Rodis said the alleged misrepresentation is still ongoing as Chevron continues to allow its reporting to stand without correction or clarification. “We hope that this will be investigated at the least,” he added.
Filipinos in New York protest the Chevron-Udenna deal on Sept. 21, 2022.
California Attorney General Rob Bonta meets with leaders of the Filipino American community from the nation’s east and west coasts on April 21, 2023. Back row, standing from left, Rodel Rodis, Ernie Llorente, Rad Abarrientos (National Youth Movement for the West Philippine Sea), and Eric Lachica (U.S. Filipinos for Good Governance-D.C.). Seated, from left, Mila Llorente, Loida Lewis, Attorney General Rob Bonta, Rocio Nuyda and Edna Rodis.
