Biz Buzz: Quibbling over P50M? Try $300M
Businessman Ramon Ang and San Miguel Corp. usually do business in the realm of “billions of pesos” and sometimes even use “billions of dollars” when talking about future big-tickets projects especially in the field of energy and infrastructure.
So it was a surprise to many people when the conglomerate sued a former business partner for qualified theft over a “measly” sum of P50 million. Big boys are not known to quibble over eight-digit figures, after all.
Well, it turns out that the amounts involved are much higher than that, if the dealings Indonesian businessman Shadik Wahono of the Citra group and San Miguel are examined more closely.
To recall, San Miguel sued Wahono for allegedly using funds of Citra Metro Manila Tollways Corp.—at that time, a company owned jointly by the conglomerate and the Indonesian—to incorporate another entity called Citra Central Expressway Corp.
According to San Miguel, the fund transfer for this enterprise was allegedly made on the sly without board approval. San Miguel only discovered later on when it took full control of the enterprise that they were made to pay for a company that they already owned. Horrors.
Officials at the conglomerate are now wondering whether Wahono—who was the Philippine point man of the Indonesian infrastructure firm that built the original Skyway in the 1990s— had, in fact, outmaneuvered even his former bosses like Siti Hardiyanti Rukmana or “Tutut,” the eldest daughter of former Indonesian strongman Suharto.
San Miguel officials are now wondering, on hindsight, how Wahono ended up “abruptly” replacing Tutut as Citra’s main signatory, including approving many transactions that ended up diluting the Indonesian group’s stake in the joint venture to a very small minority of 5 percent.
And how much was involved in the dilution of the Indonesian group that San Miguel advanced to the JV? Biz Buzz learned that the amount totals $300 million over the last five years. With the Suhartos having entrusted their Philippine business to Wahono, questions are now being raised whether the Indonesian principals even got a taste of the large sums their point man was handling for them.
Indeed, according to San Miguel’s court filings, Wahono reportedly pulled a fast one on the conglomerate worth P50 million. But could he also have pulled a fast one on his former Indonesian principals (“biting the hand that fed him” for so long, so to speak) to the tune of $300 million?
That is something that will become clearer soon as the suit filed against him by San Miguel before the courts of Singapore (where Wahono’s personal business is incorporated) progresses. One thing is for sure though: Given the mounting cases filed against him in local courts, he will find it next to impossible to do business in the Philippines again. Abangan! —DAXIM L. LUCAS
Record term, record reforms
He now holds the record for the longest tenure in a notoriously high turnover post. We’re talking about Hans Sicat, who recently ended his stint as president and CEO of the Philippine Stock Exchange.
Sicat—a former Solomon Brothers investment banker— took on the challenging task of leading the PSE six and a half years ago, before relinquishing the position last week to his eventual replacement, Ramon Monzon.
Sicat came on board during a time of rapid changes for the PSE, the local capital markets and the global financial market as a whole. And more importantly, with the mandate and marching orders for the PSE’s board, he was able to start a key set of reforms within the group formerly known as the “old boy’s club.” Well, no longer. Sicat helped guide it to become a more professional organization that is now more at par with its regional peers (ok, maybe not exactly at par, but the qualitative gaps have surely narrowed).
Some of the reforms and improvements that happened during Sicat’s watch included the implementation of extended trading hours into the afternoon; corporate governance improvements through the Bell Awards and the independent Capital Markets Integrity Corp.’s efforts, and new products like exchange-traded funds, dollar-denominated securities and public-private partnership securities.
He also helped implement services such as graduated market data packages, the Shariah compliant list and the exchange’s online platform for brokers. It was also during this time that the exchange’s technology platforms were updated, including the shift to a new trading engine in less than a year’s execution timeframe (Yes, there were a number of glitches, but hey, it’s the leaning curve).
Unfortunately, two of the biggest changes that began under his term—one physical and the other structural—were not completed before Sicat handed the baton to his successor. We’re talking about the PSE’s transfer to its gleaming new headquarters in Bonifacio Global City in Taguig and the stock market’s merger with (or more accurately, acquisition of) the Philippine Dealing System and its bond exchange and securities depository businesses.
So what will Sicat do for an encore, given that he’s too young to retire? First thing’s first: A well deserved vacation. After that … a return to the booming financial markets business perhaps? Investment banking? Watch this space, people. —DAXIM L. LUCAS
Motive
Did Energy Regulatory Commission (ERC) Chair Jose Vicente Salazar issue a press release demanding a P6.9-billion refund from Meralco to its customers due to alleged “overcollection” a day after Malacañang suspended him in order to divert attention from his own problems? The power utility wants to know.
Salazar is under the microscope for allegedly giving the green light to several filings by power firms and electric cooperatives, supposedly without having consulted the other commissioners of the ERC.
(“Don’t look at us,” said one of the power firms involved. “We filed the petition with the regulator in good faith and we received it’s approval assuming regularity.”)
In any case, industry sources said Salazar might have sensed that Malacañang was about to move against him. And it did, earlier this month, with the Office of the President issuing a 90-day suspension order for him.
Salazar’s critics think the official has been deliberately employing “squid tactics” by making noise about various power supply-related issues to deflect all allegations thrown at him and generate sympathy and sway public attention his way.
So one day after he was suspended, his office issued a press release ordering Meralco to refund P6.9 billion worth of “over-recoveries” from the past three years.
Media picked up the press release. But just a day later, the very same press statement disappeared from the ERC website.
In thumbing down Salazar’s order, ERC Commissioner Ina Asirit said the refund order, in fact, applied to all distributor utilities and electric cooperatives and not just Meralco. Whoopsie. —DAXIM L. LUCAS
Soft drink comeback?
At the stockholders’ meeting of San Miguel Pure Foods Co. on Friday, the company served soft drinks called “San Mig Cola.” Based on the label on the bottle, the beverage was bottled by San Miguel Brewery in its Valenzuela plant.
We don’t recall San Miguel announcing a return to the soft drink business (It bought Coca Cola Bottlers Philippines Inc. in 2001 then sold it back to the American parent firm The Coca-Cola Co. in 2007).
The noncompete clause has likely lapsed at this time because the deal to sell Coke happened exactly a decade ago. So is San Miguel thirsting to re-enter the soft drink business? At this time that the proposed increase in taxes on sugar-laced products is casting dark clouds over the local beverage industry?
Apparently, San Miguel has not officially brought its new soft drink to the market and is only producing these for internal consumption or maybe to be served during official events such as stockholders’ meeting, especially during the summer season. But just like how conglomerate chief Ramon S. Ang has made a big comeback in the cement business, it’s not unthinkable that he will challenge other carbonated drink producers at some point in the future. —DORIS DUMLAO-ABADILLA
