MANILA, Philippines — The ongoing battle for control of First Gen Corp. has put the retirement savings of millions of Filipino workers at risk, as state pension funds hold significant stakes in the energy firm.
The Social Security System (SSS) and the Government Service Insurance System (GSIS) each have over P1 billion invested in First Gen, according to the majority shareholder group led by Eugenio “Gabby” Lopez III. They warned on Wednesday that controversial “poison pill” provisions could trigger a buyout at a deep discount, leading to billions in losses.
The provisions, tied to transactions with Prime Infrastructure Capital Inc., would allow Prime Infra to acquire First Gen's gas and hydropower assets for about P125 billion — below market value — if management changes occur. The Lopez majority argues these clauses protect Federico “Piki” Lopez at the expense of other shareholders.
“Why would one person’s job be worth billions of pesos of other people’s money? This is a scandal,” the group said, calling for a government investigation.
The majority also pointed out that global investor KKR faces the largest potential hit, with about P12 billion in shares held through HSBC. The pension fund losses could weaken their capacity to support members and meet retirement obligations.
First Gen disclosed the clauses only after delays of two to six months, allegedly following the majority's exposure. The company has not released full investment agreements to verify the terms.
Beyond the financial risk, the provisions undermine the board's and shareholders' right to replace management — a key governance principle for publicly listed firms.