Benitezes lose prized family heirloom: PWU

By: Doris C. Dumlao - 10 years ago

CHANGING OF THE GUARD The Philippine Women’s University on Taft Avenue in Manila, owned and controlled by the Benitez family, was founded in 1919. NIÑO JESUS ORBETA

Key representatives of the Benitez family have stepped down as members and trustees of Philippine Women’s University (PWU), allowing STI Holdings to take control as their 3-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 nonstock, nonprofit, nonsectarian educational institution, which would mark its centennial in academic year 2019-2020.

Control and ownership of the university are held through membership seats instead of stock holdings.

STI filled eight seats on the board of trustees: Eusebio Tanco, who was elected chair; 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; former Education Secretary Jesli Lapus; former Makati Rep. Teodoro Locsin Jr. and Paolo Martin Bautista.

The matriarch, Helena Benitez, was retained as chair emerita.

HELENA BENITEZ on her 100th birthday on June 27 LEO M. SABANGAN II

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 in November 2011.

‘Deteriorating’

“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,” Jacob said.

He 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 a 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, on Dec. 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.

Never happened

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 that when it came in as a partner, PWU was bleeding financially and was about to be foreclosed on by Banco de Oro (BDO). 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, retirement pay, upgrade of 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.

STI began in 1983 as a computer training center with two campuses. It now has branches across the country and offers courses in information technology, business and management, tourism and hospitality management, engineering and arts and sciences.

Seven prominent women belonging to the country’s social elite, with lawyer Jose Abad Santos, who was to become Chief Justice, formed Philippine Women’s College in 1919. The exclusive women’s school became a university in 1932.

In the 1990s, the white-washed institution on Taft Avenue in Manila opened its doors to men and became coeducational, serving enrollees from nursery to graduate school since.

What went before

In November 2011, a group of businessmen led by Eusebio Tanco invested P450 million in PWU, giving the Tanco group a 40-percent stake in the nearly century-old educational

Businessman Eusebio Tanco of STI and then PWU president Francisco Benitez in a photo taken in 2012. INQUIRER.net file photo

institution.

The Tanco group owns educational network operator STI Holdings.

PWU president Jose Francisco Benitez said the Tanco group’s investment would finance the renovation of PWU buildings and upgrade equipment.

Monico Jacob, acting as spokesperson, said the group aimed to increase PWU’s student population from 4,000 to 15,000 in five years. Tanco also said they would add five new campuses in Metro Manila and in the provinces.

Earlier this month, the STI moved to take over a controlling stake in PWU, citing the Benitez group’s failure to meet its obligations under the 2011 deal. The move came after a call by Benitez to terminate the joint-venture agreement with STI.

In a disclosure to the Philippine Stock Exchange, STI served PWU and sister company Unlad Resources Development Corp. with notices of default, demanding within seven days P702 million from PWU and P223 million from Unlad. STI also sought control of two-thirds of voting rights in PWU’s board.

PWU, then Philippine Women’s College, first opened its door to students in June 1919. Founded by seven Filipino women—Clara Aragon, Concepcion Aragon, Francisca Tirona Benitez, Paz Marquez Benitez, Carolina Ocampo Palma, Mercedes Rivera and Socorro Marquez Zaballero—PWU had an initial enrollment of 190 students. It attained university status in 1932, and is the first university for women in Asia founded by Asians. PWU began admitting male students in the 1970s.

Helena Benitez—PWU chair emeritus, outstanding public servant, admired educator and pioneering woman leader—is the daughter of PWU founder Francisca and Conrado Benitez, a member of the committee that drafted the 1935 Constitution.

STI Holdings

STI Holdings, on the other hand, is the holding company within the Tanco group that drives investment in its education business.

Under its wings are the STI Education Services Group (STI ESG), which runs STI—a network of 80 schools across the country—as well as iACADEMY and the DLS-STI College of Health Professions, which provide education in IT and health, respectively.

With its stakes in PWU and West Negros University, STI Holdings has more than 80,000 students studying in ICT, business and management, education, liberal arts, and fine arts programs, among others.

In addition to education, STI Holdings also has a stake in STI Investments Inc. which owns PhilPlans First Inc., PhilhealthCare Inc. and Philippine Life Financial Assurance Corp.

Sources: Inquirer Archives, Official website of the Philippine Women’s University (www.pwu.edu.ph), STI Holdings website (www.stiholdings.com)