Biz Buzz: Means, motive, opportunity
On the surface, the complaint filed against San Miguel Corp. president Ramon S. Ang, businessman Roberto V. Ongpin and former finance secretary Gary Teves, among others, looks like your garden variety suit filed by a concerned taxpayer (with all its attendant implications) in an effort to protect the government’s interests.
However, Biz Buzz did some snooping around and found that the person who filed the complaint before the Office of the Ombudsman—Emilio Aguinaldo Suntay III, a descendant of the country’s first president—has had a long history of dispute with the state-owned Land Bank of the Philippines, one of the respondents in his complaint.
According to our sources, Suntay’s family inherited almost 1,000 hectares of land in Occidental Mindoro from its forebears, which was eventually adjudged to be agrarian reform-eligible. But the Suntays failed to reach an agreement with the government since the family was demanding some P157 million in compensation while the government felt that it was worth only a small fraction of that.
The family was able to get a favorable decision from the Department of Agrarian Reform’s regional office, though, and they then proceeded to garnish Landbank’s 42 million shares in Manila Electric Co., which, at that time, was worth about the same amount as his claim. They proceeded to order the cancellation of Landbank’s Meralco shares and the issuance of a new set of shares to Suntay through his assignee, Josefina Lubrica.
All this happened in 2008—when there was an ongoing corporate battle for control of Meralco between San Miguel and businessman Manuel V. Pangilinan’s PLDT group, making the block of shares attractive to either side. (The government financial institutions decided to eventually sell their shares, as a block, to San Miguel.)
The Supreme Court, however, nullified the transfer of the Meralco shares to Suntay, thus allowing Landbank to sell the stocks to San Miguel at P90 a share over a three-year payment period. The full payment was settled early last year.
At the time San Miguel bought the Meralco shares at P90 each, these were trading on the Philippine Stock Exchange at around P60 a share. The stock price eventually shot up to P300, thanks to the rivalry between RSA and MVP.
So does Suntay have an ax to grind against Landbank and the other respondents in filing his complaint? Possibly. But is there something more sinister behind his complaint? Perhaps someone pulling the marionette strings? Someone who wants to cast a cloud of doubt over the business reputations of the respondents? According to our sources, quite possibly, too.—Daxim L. Lucas
Speaking of descendants…
Securities and Exchange Commission Chair Teresita Herbosa was asked by The Asset editor-in-chief Daniel Yu in the magazine’s forum on Tuesday to assess where she thinks the SEC is today compared to where she wants it to be. Herbosa was asked to score the SEC based on a scale of one to 10 (with 10 being the highest).
Herbosa explained that the SEC was still in the capacity-building stage, sending people to study in Korea and Japan or locally in AIM or to attend workshops abroad. The SEC did not scrimp on such tool-upgrading initiatives, she stressed. Having said that, Herbosa—a descendant of national hero Jose Rizal and at one point a nominee to be Supreme Court chief justice—said she would rate the SEC at 7.5. “Not bad,” Yu told the audience.
Asked further whether she was gunning for more capital market regulation or instead focusing on more development and marketing initiatives, she said she was never an advocate of more regulation.
“I would prefer the SEC to just be in the background,” she said, adding that self-regulatory organizations like the Philippine Stock Exchange should be the ones taking the more active role in regulation.—Doris C. Dumlao
No piercing of the veil
The search for a white knight by shuttered Export and Industry Bank is nearing a breakthrough as—ahead of the Philippine Deposit Insurance Corp.’s bidding of the bank’s commercial banking license and assets—the Supreme Court quashed the legal impediment that will otherwise make a takeover very costly.
In a resolution dated September 5, the high tribunal’s second division resolved the debate on the so-called “piercing of the corporate veil of corporate fiction.”
To recall, an original deal for Banco de Oro to take over the assets and liabilities of Export Bank encountered a legal stumbling block after a regional trial court ordered the payment of P1.5 billion in damages to complainant Pacific Redhouse (said to be affiliated with the Gatchalians) and applied the principle of piercing the veil against the bank and its subsidiary EIB Securities. By the time the Court of Appeals dismissed the case, Export Bank was already placed under the receivership of PDIC.
The high court ruling said the doctrine might be applied only “to determine established liability, not to confer jurisdiction that was never acquired.” This removes the overhang to whoever will participate in the PDIC’s bidding for Export Bank’s license and assets in October. The complainants, however, may still file a motion for reconsideration, which must be addressed by the Supreme Court before the ruling becomes final and executory.—Doris C. Dumlao
‘Peaceful’ retirement
With the looming second retirement of Development Bank of the Philippines president Francisco del Rosario Jr. at month’s end, his staffers are throwing him a despedida party Wednesday (as has been customary for presidents of the bank these past few years).
In informing Malacañang of his decision to retire (his second, after he left the bank in the 1990s), Del Rosario said that he wanted more time to rest and more time to spend with his family. So said a Palace spokesperson last July.
But will he really retire to a more relaxed lifestyle?
According to a reliable source, Del Rosario is being courted to run the eventual merged entity coming out of the union of Philippine National Bank and Allied Banking Corp.
Word going around is that Del Rosario is in the process of assembling a team for the soon-to-be-merged bank owned by tycoon Lucio Tan (he’s supposedly inviting some key lieutenants to join him, according to the rumor mill).
Supposedly, the principals of the bank have made Del Rosario “an offer he can’t refuse.” So much for a peaceful retirement.—Daxim L. Lucas
Sin tax at the Senate
From all indications, the Senate version of the hotly debated sin tax bill will try to find some middle ground between the passionate all-or-nothing stand being pushed by the government and the appeal of tobacco manufacturers for a more “reasonable” increase in excise tax rates.
We hear the tobacco industry is pinning its hopes on the Senate after it was shown no quarter during the deliberations in the House of Representatives.
Kudos to the current administration for its dogged pursuit of a big increase in tax rates for sin products, of course, but according to our sources, representatives from the tobacco industry were not even allowed to present their case during committee hearings at the Lower House. Their representatives were present and ready to make their case, but they were not given the opportunity. And before they knew it, boom, the Lower House version of the bill was passed.
The case looks different in the Senate, with several senators appearing to be more willing to listen to all parties involved, and not just one side.
Even Senate President Juan Ponce Enrile has shown his hesitation at railroading the upper chamber’s version of the bill. Maybe that’s one reason why there’s persistent talk of a Senate coup against him, courtesy of displeased administration allies.—Daxim L. Lucas
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