The ceasefire lasted 26 days.

On June 9, the Lopez family majority — the three branches holding 71% of Lopez Inc., the family’s private holding company that sits at the top of the Lopez group — issued a press release calling Federico “Piki” Lopez’s signature hydropower deal “horrible”, and demanded that regulators compel full disclosure of where the money went. They alleged that Piki agreed to pay Prime Infrastructure P50 billion as a “transaction premium”, meaning, an entry fee for the right to join Prime Infra’s hydropower business, and that only P25 billion of the original P75 billion was “construction equity”, or genuine money for actually building the dams. “In effect, Piki funded the whole project that is yet to be built, has no cash flow for years, and faces multiple completion risks,” the majority said. “This is a horrible deal for First Gen.”

They also asked a question no public document has answered: “Did Prime [Infrastructure of tycoon Enrique Razon] pay a premium for getting full control of the hydropower company? If so, how much and who got it?”

The majority’s latest public statement landed 26 days after they had announced a ceasefire. On May 14, they had withdrawn the Feburary board resolution that fired Piki as president and CEO of Lopez Inc. They called it an opening for discussions and that they were “open to a ceasefire” subject to fair compromise and access to information. A day later, Piki welcomed the gesture as “a possible first step for all parties to finally resolve the issues dividing the family.” At the May 28 First Gen annual stockholders’ meeting, Piki mentioned it in three careful sentences, called it a “peace overture,” and moved on to discuss energy projects.

The window, such as it was, had closed.

The P50 billion allegation is the most specific financial claim the majority cousins have made in the past three months of public warfare, and it rests on internal board documents they say they recently accessed, but which have not been made publicly available or disclosed. Initially, First Gen did not address the specific breakdown. But on June 10, following a prompt from the stock exchange to clarify the news reports, First Gen pushed back. It countered that the premium paid to Prime Infra was standard practice, reflecting at least five years of development work already completed before First Gen came in. Then came the hard push back: Piki’s camp called the majority’s characterization “erroneous, malicious, and shows an utter lack of understanding of basic M&A (mergers and acquisitions) transactions.”  

This story reconstructs where that P50 billion number comes from, what the public filings do and do not confirm, and why the gap between what First Gen told the stock market and what the majority says the internal records show is the question regulators — the Philippine Stock Exchange (PSE), and the Securities and Exchange Commission — are now being pressed to resolve.

What the public was told, in order

First Gen Corporation is the listed energy company of the Lopez group. “Listed,” meaning its shares are traded on the PSE, so ordinary investors, pension funds, and global institutions can buy and sell a piece of it. As a listed company, it is legally required to disclose material information to the exchange immediately after they arise. These include facts that could affect an investor’s decision to buy or sell.

The hydro deal unfolded in stages, each generating a new mandatory filing. On February 13, First Gen’s board approved a Binding Heads of Terms Agreement with Prime Infra. Think of it as a detailed letter of intent before the actual contract for a 40% stake in Prime Infra’s pumped storage hydroelectric portfolio. Pumped storage works like a giant rechargeable battery for the power grid: when there is excess electricity, it pumps water uphill into a reservoir; when the grid needs power, it releases the water downhill through turbines. (See diagram below)

The two projects involved are the 600-megawatt Wawa project in Rizal and the 1,400-megawatt Pakil project in Laguna. The price for that 40% stake: P75 billion, of which First Gen had said P62.5 billion “will be used to directly fund construction and the equity requirements of the projects.” Meaning, it told investors, the bulk of the money was going to physically build the dams and cover the company’s share of funding obligations along the way. (READ: Lopez vs Lopez: The secrecy fight behind the Razon power deals)

Neither dam is operational yet. Both are scheduled for completion by 2030, making this a long-duration bet on infrastructure. Meaning, no income will be coming out of this investment for years, before 2031. (More on this in the related article below)

Three weeks later, on March 6, the final binding contracts were signed. By that point, the stake had been reduced from 40% to 33%, and the total investment price reduced accordingly to P61.875 billion. These contracts were filed with the stock exchange on March 9 and contain the full terms of the deal, including the payment schedule.

What neither the March 9 filing nor the February 13 announcement mentioned was a clause buried in those same contracts: if Piki Lopez or his designated successors were removed from leadership during the construction period and up to a year after the dams start operating, Prime Infra could force First Gen to sell back its stake at a 25% discount, a loss of about P15.5 billion. That clause — what the majority has been calling a “poison pill” and First Gen calls a “change-of-management-control” provision — appeared publicly only on April 30, in an amended filing, 60 days after the contracts were signed, and only after the Lopez majority had already gone public with their accusations. (READ: How to make yourself very expensive to fire: The Lopez cousins’ war)

First Gen has consistently maintained that all disclosures followed proper procedures, and that the board unanimously approved all the arrangements, including the change-of-management-control provision.

The split inside the deal

To understand the majority’s P50 billion allegation, we need to understand that the P61.875 billion First Gen agreed to pay was not one lump sum for a piece of two dam projects. It was two legally distinct transactions that work differently and flow to different places.

The first part was a straight purchase of existing shares. First Gen’s subsidiary FGEN Aqua Power paid P12.5 billion to Prime Infrastructure Inc. for its existing 30 million shares in Prime Hydropower Energy Inc. (PHEI), the company that owns the two dam projects. When existing shares are purchased this way, the money goes directly to the seller, Prime Infra. It does not go into PHEI. It does not build anything.

The second part was a subscription to newly issued shares. FGEN Aqua subscribed to 102,984,825 fresh PHEI shares for P49.375 billion. When a company issues new shares and an investor subscribes to them, the money flows into the company itself — into PHEI, in this case. In principle, this is the money that funds construction.

But the March 9 stock exchange disclosure sets out how that P49.375 billion is actually released. There are four tranches: P16.5 billion paid upfront when the deal closed; a bank standby letter of credit — a bank’s written promise to pay on a set date — of P9.9 billion due April 15, 2027; another such bank guarantee of P14.85 billion due April 15, 2029; and finally P20.625 billion payable “in portions, as and when the PHEI board of directors will deem it necessary for use by the projects.”

That last tranche is the only one the filing explicitly ties to the projects. The first three tranches — totaling P41.25 billion — flow into PHEI without any specified construction purpose in any document available to the public.

This is the crux of the majority’s allegation. Think of a joint venture to build a factory: some of the money pays the partner for their existing ownership stake in the project company. Some go into the project company’s general funds. And only a portion — specified in the contract — is earmarked to pay for actual construction materials and labor, for bricks and machinery. What investors were told was that the bulk of the money goes toward building. What the majority says the internal documents show is that most of it was a premium — an entry fee paid to get into the deal — not money headed for the dams.

Breaking down the majority’s P50 billion math

The P50 billion/P25 billion breakdown does not appear in any stock exchange filing, any quarterly financial report, or any of the signed contracts. It is the majority’s reading of internal board documents they say they recently accessed. First Gen has not released those documents and has not directly challenged the specific breakdown. Usually, public allegations like this trigger the PSE to require First Gen to explain, which then results in an explanation the exchange would make public the day after.

The majority’s math, reconstructed from the deal structure and their public statements, starts from the original deal: a 40% stake for P75 billion, of which First Gen said P62.5 billion would go to construction and equity requirements.

Step one: identify the construction money. In the final contracts — at reduced 33% stake for P61.875 billion — the only tranche explicitly designated for construction is P20.625 billion. That money described as payable whenever the PHEI board calls for it to fund the projects.

Step two: scale back to the original 40%. If the construction tranche at 33% was P20.625 billion, then at 40% deal size, the proportional equivalent would be roughly P25 billion. That is what the majority calls the genuine construction component of the P75 billion.

Step three: subtract. P75 billion minus P25 billion leaves P50 billion. That is waht the majority labels the “transaction premium” or the entry fee to be part of the project. It covers both the P12.5 billion paid directly to Prime Infra for its existing shares, and the remaining portion flowing into PHEI above the construction-earmarked tranche, whose exact purposed has yet to be explained.

The majority’s follow-up question, which they are asking the PSE and SEC to help get answers to: where exactly does that P50 billion premium go? Does it reimburse Prime Infra for the years of government approvals, site development, and engineering work it had spent before First Gen arrived? Does it represent the agreed value of the dam sites, the water rights, and the government-issued licenses that allow those sites to generate and sell electricity — assets that Prime Infra had secured and First Gen was buying into? Did any portion flow back to Prime Infra as additional profit above and beyond what the contracts show? “So much is being hidden from the investing public that regulators must step in,” the majority said.

It bears repeating that premiums on deals like this are not automatically wrong. Paying extra to buy into a project that someone else has already spent years developing — for the approvals already obtained, the risks already absorbed, the construction already begun — is standard practice. The majority’s complaint is not that the premium exists. It is that the investors were told in that February 13 disclosure that the money was going into construction.

First Gen: Standard in M&As

First Gen addressed the premium question directly in its June 10 statement to the stock exchange. It said a premium is “a standard consideration in M&A (mergers and acquisitions) transactions” and is “not free, superfluous money, but a payment in consideration of Prime Infra’s own investments and costs poured in over many years that brought the projects to its de-risked state at the time of First Gen’s acquisition.” It said Prime Infra had achieved financial close on what it called the largest financing agreement executed in 2025, secured long-term power supply contracts under the Green Energy Auction-3 (GEA-3) program, obtained all development rights and authorizations, and had begun construction on both dam sites before First Gen came in. At that point, First Gen said, the projects had passed the highest risk development phase and entered a stable construction state. 

In the world of massive infrastructure, “de-risking” is the invisible, exhausting runway where multi-billion-dollar projects either take off or die. Before a single cubic meter of concrete is poured for a dam, a developer must sink years of capital into securing exclusive water rights, navigating complex environmental compliance, and obtaining social clearances from local communities. For Wawa and Pakil, Prime Infra also absorbed the risk of engineering the grid integration and securing long-term power supply contracts under the state’s GEA-3 program — milestones that allowed it to secure a massive financing deal in 2025. First Gen’s argument is that you don’t just pay for the physical bricks of a dam; you pay a premium for the fact that the partner took all the early-stage gambles and handed over an investable reality. It called the majority’s claim that Piki “funded the whole project” erroneous and malicious. 

What First Gen did not release in its clarification, however, are the internal PHEI capitalization documents that the majority says show how subscription proceeds are allocated inside the holding company. According to the majority, those internal documents support their P50 billion/P25 billion breakdown, and they remain private.

The P625 million that was never spent

The reduction of First Gen’s stake in the hydro project from 40% to 33% carries a separate set of questions. Under the Revised Corporation Code, a shareholder holding one-third plus one additional share, meaning more than 33.33%, has the legal right to block certain major corporate decisions that would normally require approval by two-thirds of shareholders. These decisions include selling off major assets or fundamentally changing the company’s structure. It functions as a veto: regardless of how large the majority’s stake, they cannot push those actions without the consent of the 33.33% shareholder. That one-third-plus-one-share is the threshold for that protection to kick in.

At exactly 33%, First Gen sits just below that threshold. In the majority’s calculation, crossing it would have required relatively little effort. At the final deal price of P61.875 billion for 33%, each additional percentage point to ownership costs roughly P1.875 billion, meaning the gap between 33% and 33.33% would have cost roughly P625 million, a fraction of the total deal size. From the majority’s perspective, sacrificing crucial veto power over a gap of P625 million represents a significant structural concession. First Gen, however, rejects this framing, countering that rigid adherence to ownership percentages misrepresents the broader realities of corporate capital allocation. 

At the May 28 annual stockholders’ meeting, First Gen President and COO Giles Puno said the company “decided to reduce its stake from 40% to 33% to ensure prudence in its capital allocation process,” adding that First Gen has many other projects in the pipeline, noting that “there’s nothing that will prevent First Gen from engaging in discussions with Prime to scale the investment back up.” (READ: From ‘king’ to ‘steward’: How Piki Lopez answered the Lopez family rift question)

In its June 10 statement, First Gen added that the financial considerations involved in managing capital across multiple massive energy projects far “outflank” the value of the rights provided to a 40% or 33% shareholder.” Also, First Gen maintains that the majority’s P625 million math is fundamentally flawed because it views the transaction in a vacuum, ignoring the significant development costs and risks Prime Infra had already absorbed “over more than five years” before First Gen ever stepped in.

The majority’s counter is that this misses the point: if Piki is ever removed from leadership before the dams are completed and running — which is precisely what the majority has been trying to achieve since February — Prime Infra can exercise the penalty clause and buy out First Gen’s entire stake at a 25% discount, erasing P15.5 billion. At that point, there would be no stake left to increase. First Gen supposedly gave up both its legal veto right and its financial protection in the same reduction, for reasons that, they say, remain publicly unexplained.

The independent directors

June 9 was not the first time the majority raised questions about whether First Gen’s board had been properly informed. In their April 20 press release about the penalty clauses, they said they were “trying to find out if it was approved by the board and its independent directors, or if properly disclosed to them.” That was a question from a position of incomplete information. June 9 was a different move.

For the first time, the majority named three people: Manuel Ayala, Alicia Rita Morales, and Edgar Chua, the independent directors on First Gen’s board. The question directed at them shifted from whether they had been informed to whether they were given enough information ahead of time to study the deals and “properly do their job in protecting the interest of the company and its shareholders.” The majority had spent weeks accessing board documents before reaching the point of attaching names to the question publicly.

To understand why this matters, it helps to understand what independent directors are supposed to do. Unlike regular board members, independent directors have no ties to the controlling family and no management role inside the company. At a listed company like First Gen, they exist specifically to represent the interests of the investing public: the pension funds, individual investors, and global institutions that buy shares on the stock exchange but have no seat in the boardroom and no way to scrutinize deals before they are signed. It is the independent directors’ job to ask hard questions and, when necessary, vote against transactions they believe are not in the company’s interest. (READ: [Vantage Point] When independent directors stop being neutral)

First Gen has cited the board’s unanimous approval of the hydro deal as evidence that proper process was followed. The majority is now asking whether that unanimity reflects genuine scrutiny or a procedural formality. It has previously alleged that the original P75 billion hydro deal was presented at a board meeting under the agenda item “other matters” and discussed in a closed session lasting one hour. First Gen’s position is that the relevant approval was made at the First Gen board level, and that it was properly deliberated. What remains publicly unconfirmed is the extent to which the independent directors at the First Gen level had advance access to the deal documents before voting. First Gen has not addressed that specific question.

By naming Ayala, Morales, and Chua, the majority is widening the circle of accountability beyond Piki, beyond management, to the governance layer that is supposed to protect investors who have no other way to look inside the company.

What this means beyond the family

First Gen’s public shareholders include the Social Security System (SSS) and the Government Service Insurance System (GSIS), the state pension funds that collect monthly contributions from millions of Filipino workers in the private and government sectors and invest those contributions to fund future retirements. They are not participants in the Lopez family dispute. They are institutions managing workers’ retirement savings, and the rules requiring listed companies to disclose material information promptly exist precisely because they, like most public investors, have no other way to know what is happening inside the company.

When a transaction of this size is publicly described only as going to “construction and equity requirements,” and a shareholder group reading internal board documents now says the structure allocated most of the money to a premium rather than construction, the workers whose pension money sits in First Gen shares were navigating with an incomplete information. First Gen maintains its disclosures were proper. It said in its June 10 statement that the P75 billion and P62.5 billion figures in the February 13 announcement corresponded to the original 40% deal, and that the revised 33% stake and P61.875 billion total were properly disclosed in the March 9 filing. Its position is that the two disclosures together constitute a complete record.

The majority says they were not. Regulators have not yet issued a finding.

The broader question this case raises extends beyond this family and this company. Every listed Filipino family conglomerate with a controlling shareholder sitting above a publicly traded subsidiary faces the same structural test: are the independent directors on that subsidiary’s board genuinely independent of the family that controls the parent, and are they receiving the full documentary picture before they vote? The Lopez case is not an unusual edge case. It is testing the most basic assumption on which Philippine minority shareholder protection rests — that what gets filed with the stock exchange is a complete, accurate, and timely account of what is actually happening inside the company.

On May 14, the majority said it withdrew the ouster resolution because harm had already been done to everybody — “reputational damage,” a family in a “fishbowl,” “agreements signed with undeserved financial penalties especially for the investing public.” On June 9, that last phrase became the headline. (READ: Who writes the Lopez story? How lawyers, headlines, and ABS-CBN shape a family war)

The ceasefire lasted 26 days. Whether it resumes, or whether the P50 billion allegation hardens into the next front of a longer war, depends on a question neither side has yet been compelled to answer in public: what do the board documents actually show? – Rappler.com

Lala Rimando wrote about Philippine business, and managed newsrooms, including Newsbreak, ABS-CBN, Rappler, and Forbes, for over 25 years. She’s now based in La Union, taking care of her mom with dementia, and working on the multimedia biography of the late John Gokongwei.