STI gains control of PWU, Benitez representatives quit
MANILA, Philippines — Key representatives of the Benitez family have stepped down as members and trustees of Philippine Women’s University, allowing STI Holdings to take control as the three-year-old partnership collapsed.
In a press statement on Monday, STI said following these resignations, it now controlled eight out of 10 board seats as well as 11 of the 15 memberships in PWU, a non-stock, not-for-profit, non-sectarian educational institution which will mark its centennial in academic year 2019-2020.
STI filled eight seats in the board of trustees as follows: Eusebio Tanco, who was elected chairman; Monico Jacob, who was elected president and chief executive officer; Maria Vanessa Tanco who remains as executive vice president and chief operating officer; Jaeger Tanco; Yolanda Bautista; Jesli Lapus; Teodoro Locsin and Paolo Martin Bautista.
The matriarch Helena Benitez was retained as chair emeritus.
The Tanco-led STI earlier moved to take over a controlling stake in PWU, citing the Benitez group’s failure to meet obligations under a cooperation deal inked in 2011. STI invoked the Benitez group’s failure to pay STI for loans through a debt-to-equity conversion that was supposed to have been completed way back in November 2011.
“PWU was deteriorating financially and physically, and was even about to lose its key accreditation because its quality of education had slipped. Enrollment has also been on the decline,” said Jacob.
Jacob said STI had to invest more funds to arrest PWU’s decline, fix the school premises and upgrade substantially its quality of education.
“The students are paying good money and deserve good education. We will do our best to deliver on this legacy and promise of PWU,” Jacob said.
STI served notices of default on PWU and its sister company, Unlad Resources, last December 9 and gave them seven days to pay the accumulated amount of P923 million, or turn over majority control of the school.
Under the original agreement, STI should have been paid through the conversion of all its loans into 40-percent equity in Unlad which in turn was to absorb all the real estate assets of PWU in a share-for-property swap. The Benitez group was likewise obliged to raise the authorized capital of Unlad to P1.5 billion to accommodate the infusion and be allowed to issue the shares as payment to STI.
The capital increase never happened, which meant that Unlad’s capital remained at P20 million to date.
The Benitez group was also supposed to get a ruling from the Bureau of Internal Revenue saying that the share-for-property swap was tax exempt under the 1997 tax reforms. In case no exemption was granted, the Benitez Group was supposed to shoulder the tax liabilities.
STI said what when it came in as a partner, PWU was bleeding financially and was about to be foreclosed upon by Banco de Oro. STI said it bought the debt paper from BDO and provided additional funds needed to pay for salaries and wages, utilities, repair leaks, fix campus flooding, and retirement pay, upgrade laboratory facilities and learning, and other operational expenses. It also provided the professional and technical support to establish the financial, accounting and human resources system needed by PWU.
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