STI stops PWU takeover ‘for the students’

MANILA, Philippines–STI Holdings Inc. has deferred its takeover of Philippine Women’s University (PWU), saying it was putting the welfare of the students ahead of the enforcement of its rights as an unpaid creditor.

This was after the group found the university had gone on lockdown on Monday and postponed the resumption of classes to Jan. 7.

STI said PWU was indebted to it to the tune of P928 million and had declared the Benitez family that owned PWU in default of the loan.

The Benitez family that owns the university has contested the declaration of default and the amount payable to STI.

In a press briefing on Monday, STI chair Eusebio Tanco said the Benitez family was “using the students and community as hostage.”

“We have no desire to escalate a purely creditor-debtor/boardroom issue to a level where the higher interests and welfare of the students will be damaged and prejudiced. As educators and responsible businessmen, the students are always our priority,” STI president Monico Jacob said in a letter dated Jan. 5 to PWU president Jose Francisco Benitez.

“For this reason and to avoid dragging the students, and for that matter, the faculty and staff into this issue and despite your refusal to pay your obligation under our agreement, we are holding in abeyance enforcement of our ‘step-in’ rights as unpaid and aggrieved creditors,” Jacob said.

Jacob said STI was reverting to the status quo prior to Dec. 22, 2014.

On that date, STI declared the Benitez family in default of its loan with STI and invoked previously signed undated resignation letters to enforce its “step-in” right, gaining control of the board of trustees.

Open up

“We are doing this to encourage the Benitez family to open up the university soonest,” Jacob said, noting that on Monday, no one, not even the students who were expecting to enrol and attend classes, was allowed to enter the campus.

Jacob said STI would remain members of the board of trustees but the day-to-day governance would remain the responsibility of the Benitez

family.

“This act, however, shall not be misconstrued as a waiver of our other rights as unpaid creditors nor is it a waiver of our declaration that the PWU is in default of the agreements signed by the parties,” Jacob said.

During the briefing, he said STI was reserving its options to pursue other remedies, including filing a complaint in the Department of Education for the university’s unilateral deferment of the opening of classes.

When the Benitez family obtained the loan from STI and signed the undated resignation letters in 2010, Tanco said they had basically thrown in the

towel.

No debt of gratitude

According to Jacob and Tanco, after coming in as a joint venture partner, the STI group helped PWU avoid creditor foreclosure, injected liquidity to pay the faculty, fixed the facilities and even helped the management reconstruct its financial statements and human resource records.

“It hurts because walang utang na loob (they have no debt of gratitude). After we’ve done all of these, they refused to pay us,” Tanco said, accusing the Benitez family of being “totally immoral” even as they “claim to be educators.”

“We’re man enough to fight without using other people as a shield. We don’t involve the students, we don’t tell lies to the alumni,” he said.

Beyond an appeal for sympathy, Tanco said the Benitez family had no legal ground to stand on and challenged the family to make good on its promise to pay up.

The STI officials reaffirmed that they would walk away if the Benitez family paid up.

In a statement Monday, the Benitez family said Tanco had only his STI group to blame for PWU’s “blighted campuses.”

The family admitted PWU was experiencing financial difficulties some four years ago, when STI acquired PWU’s debt with Banco de Oro amounting to P230 million, paving the way for STI’s entry into the university.

But the Benitez family statement suggested that STI had been handling the operations of PWU since then, through managers appointed by Tanco, while the family handled only the academic side.

Contrary to STI’s claim that PWU’s enrollment was down to 2,000, the university has had a steady enrollment of 5,000 under current PWU president Jose Francisco Benitez, the family said.

“This despite a marketing budget of P26 million under a Tanco-appointed marketing group whose efforts did not result in the promised increase to 10,000 announced by Jacob when the Tanco group joined PWU in 2011,” the family said.

The Benitez family also accused STI of ramping up “propaganda and disinformation,” noting that it was only to “force the family to agree to onerous settlement terms.”

Support for Benitezes

“STI bought the PWU debt in 2011 and came in as investors, not as creditors. This was why all BDO principal and interest payments were suspended in accordance with the November 2011 agreement,” the Benitez family said.

Meanwhile, the academic council, school deans, parents association, student council, faculty union representatives and alumni core group of STI and its basic education arm, Jose Abad Santos Memorial School (JASMS), issued on Monday a statement of support for the Benitez family.

“We strongly believe in the educational mission and pedagogical approach by which the university and JASMS were founded. We strongly support the founding family represented by former Senator Helena Z. Benitez,” the statement said.

“STI style of education is not compatible with the PWU and JASMS educational principles and mission,” the statement said. The Benitez family explained that the “tipping point” in the issue was Tanco’s move to develop the PWU’s 10,000-square meter JASMS campus in Quezon City into a “JASMS District Mall” complete with a twin tower residential-commercial condominium.

Tipping point

For the Benitezes, the “tipping point” was a plan by STI to partner with Ayala Land Inc. to redevelop the JASMS property. The family said it also rejected Tanco’s plan for PWU to take out a P500-million loan from STI to participate in the condo mall project.

“We reiterate our commitment to uphold the ideals and vision of the PWU and JASMS founders…We will settle our financial commitment to Mr. Tanco and STI, and we have offered such, but we will do so only under fair and just terms,” the family said.

Tanco, on the other hand, said the Benitez family only wanted STI to take a “haircut” or accept lower terms than previously agreed upon.

Originally posted:  4:33 PM | Monday, January 5th, 2015

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