By Roderick T. dela Cruz

THE uneasy partnership between the Lopez group and San Miguel Corp. within Manila Electric Co. is being threatened by the fight for control of Express Telecommunications Co., which is seeking a re-entry into the mobile phone business.

A vulture fund allied with San Miguel, Trans Digital Excel Inc., is fending off the attempt by the Lopez group?s Bayan Telecommunications to regain its original 46-percent stake in Extelcom.

Bayan said its shareholdings in Extelcom held by Marifil Holdings Corp. were illegally diluted to 8 percent when the Securities and Exchange Commission approved, under a court-supervised rehabilitation plan, the conversion of Extelcom?s debt to creditors led by Trans Digital into equity.

San Miguel president Ramon Ang had earlier confirmed that his company was in negotiations with the management of Extelcom, led by Trans Digital Excel, to acquire Extelcom, in addition to San Miguel taking over, in partnership with Qatar Telecom, the moribund Liberty Telecom.

Bayan said it was unfazed by the entry of San Miguel as a telecom competitor.

?Bayan?s position is that we have never been afraid of competition and we even welcome it if it will improve the lives of consumers,? said Bayan?s vice president for corporate communications John Rojo.

?Our track record has shown that we are willing to enter into mutually beneficial arrangements with our competitors. But the most important issue here is whether or not the law was violated.?

Extelcom recently asked the National Telecommunications Commission to assign it a higher frequency band so it could re-enter the industry through the global system for mobile communication platform, which is now dominated by Smart Communications and Globe Telecom.

But in a case filed at the Court of Appeals, Marifil Holdings of the Lopez group described Trans Digital Excel as a vulture investor that never intended to rehabilitate Extelcom, but had merely intended to flip the acquisition.

?It now appears from published reports that Trans Digital did precisely that?by selling all its rights in Extelcom to the San Miguel group for an undisclosed profit,? Bayan said in a statement.

Rojo also said Trans Digital acquired the advances made by Millicom Cellular S.A., a foreign minority shareholder in Extelcom., which were then converted into a 59-percent equity.

?But to do this, the capital stock of Extelcom had to be decreased first and then subsequently increased, resulting in the dilution of Marifil?s shareholdings from 46 percent to 8 percent,? Rojo said.

?This would legally require the vote of shareholders holding at least two thirds of the outstanding capital stock, including Marifil?s.?

The Lopez group proposed an alternative rehabilitation plan for Extelcom, where Bayan would partner with Extelcom to use the 850 megahertz frequency band for 3G [third generation] services.

But the Bayan proposal only wants to use Extelcom?s assigned frequencies without reviving the telecom company, according to lawyer Plaridel Bohol II of Trans Digital.

He claimed that BayanTel had long given up on Extelcom and allowed its stake to be diluted due to its unwillingness to put in more capital to pay P9 billion in debts.

Still, BayanTel was made privy to Extelcom?s plan to upgrade its analog network to the digital GSM standard.

?Not long after, BayanTel obtained its own GSM frequency assignment to become a direct competitor of Extelcom,? Bohol said.