Antonio Tiu: Stained professional reputation

Until after businessman Antonio Tiu’s testimony the other week at the Senate blue ribbon subcommittee hearing on the so-called Hacienda Binay, I was inclined to give him the benefit of the doubt about rumors that he is a dummy of Vice President Jejomar Binay.

His track record is impressive. At age 39, he is president and CEO of AgriNurture Inc., the first agricultural company to be listed on the stock exchange. He is also chair, president and CEO of Greenergy Holdings Inc., a holding company for corporations engaged in renewable energy.

In 2009, he was the Ernst & Young Emerging Entrepreneur of the Year. Two years later, he was cited one of Ten Outstanding Young Men for agribusiness.

He exuded confidence when he claimed ownership, through Sunchamp Real Estate Development Corp., of a 150-hectare property in Rosario, Batangas, that is being linked to Binay.

When asked to show proof of his ownership, he showed a one-page unnotarized memorandum of agreement. He stated that he paid P11 million as down payment for the P450-million property and the balance will be paid by way of postdated checks after the certificate of title is turned over to him by the seller, Laureano Gregorio.

Despite the lack of notarization, he said the sale is valid and that his rights over the land are amply protected.

Interests

If Tiu were not the CEO of a company engaged in the acquisition and development of agricultural land, his claim that he bought a 150-hectare property and paid initially P11 million on the strength of a one-page unnotarized contract of sale would, to an ordinary layman, be acceptable.

A person with scarce knowledge of the law on ownership may find nothing wrong with that arrangement, more so, if his lawyer says so. But Tiu does not fit that description. Having been in the business of agricultural production for many years, culminating in his listing of AgriNurture in the stock exchange, he knows very well the risks of buying real estate without proper documentation.

Indeed, although the memorandum of agreement is not notarized, the sale is valid between Tiu (or Sunchamp) and Gregorio, assuming the latter is the owner of the property. It would have been better though if Tiu demanded the notarization of the deed of sale before making the down payment because a notarized (or public) document will further strengthen his rights.

In a notarized deed of sale, the notary public certifies that the parties have acknowledged to him that their signatures are their voluntary or free act. With this certification coming from an officer of the court, the seller cannot later claim (or if he does, will find it difficult to prove) that he was coerced or forced against his will into signing the deed of sale.

Due diligence

Why the seasoned businessman in Tiu or his lawyers failed or did not insist on this critical requirement is a puzzler. As lawyers put it, it’s de cajon or standard practice. Considering that Rosario, Batangas, is a first-class municipality, there is no dearth of notary publics in the area or its adjoining towns who could have taken on that notarial task.

Whether the omission is deliberate or an act of negligence is debatable. But noticeably, there are certain activities in his purchase of the 150-hectare Batangas property that are indicative of lack of diligence.

The required clearances from the Department of Agrarian Reform (DAR) for the conversion of the land into a tourism project have not been obtained. Neither did he check if Gregorio had clean titles [or is the true owner] of the tracks of land.

The failure to address these matters beforehand cannot be excused by the claim that the sale “is a work in progress” or any financial obligation that may later arise would be deducted from the balance of the purchase price.

By that time, the DAR may have ordered the reversion of the lands to their former agricultural condition or the properties are enmeshed in conflicting claims of ownership. There goes the P11-million down payment and whatever money already spent for the supposed agro-tourism project.

These incidents raise some questions about Tiu’s managerial or professional capabilities.

Consequences

Under these circumstances, if I were a stockholder of any of the two publicly listed companies that Tiu heads, I would be concerned about my investments.

There are very strict rules in the management of companies that solicit investments from the public through the stock market or by selling securities. The financial accounting rules for these companies are more stringent so much so that the credentials of their external auditors are closely reviewed by the Securities and Exchange Commission before they are given permission to do their work.

The stock exchange requires these companies to make periodic disclosures about material developments or events in their operations to ensure the prompt dissemination of information to their stockholders. Through these requirements, the investments in these companies are monitored to ensure that they are properly used by the people who manage their affairs.

The cavalier way by which Tiu handled the acquisition of the so-called Hacienda Binay does not inspire confidence about his management of the two listed companies. The stiff drop in the prices of the stocks of these companies is the stockholders’ way of expressing their sentiments about Tiu and his business practices.

Is he being forthright with the stockholders in the management of these companies? Are there other skeletons in the closets of these companies that have not been disclosed?

Rightly or wrongly, Tiu’s professional reputation has been stained by events in the investigation of the alleged unexplained wealth of Binay.

Unless Tiu comes up with effective damage control measures, the benefit of the doubt that many have given him at the start of the subcommittee hearing may be irrevocably eroded.

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