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Romero dispute shifts to high gear

By: - Reporter / @daxinq
/ 12:38 AM April 21, 2015

Conclusion

In 2012—eight years after Michael “Mikee” Romero assumed control of Harbour Centre Port Terminal Inc.—he said his father, Reghis Romero II, came to him a broken man.

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“At that time R-II Builders had collapsed,” he said, referring to the elder Romero’s real estate firm. “He was wiped out. He said, ‘Mikee, I don’t even have money [to buy] groceries’.”

The younger Romero (an aggressive businessman, sports patron and, himself, a lover of polo and basketball) said he was shocked by this admission of financial distress, given the fortune that his father was known to have built up in the 1990s.

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“What happened? Where did all his money go? He spent it all,” Mikee told the Inquirer in an interview.

Despite his incredulity at the father’s supposed dire financial straits, Mikee said he agreed to restore Reghis as the head of Harbour Centre, giving his operational control beyond his previous position of being a semi-retired company chair.

“I said ‘Ok, dad. I’ll pay you a salary of P1 million a month. You run it,” he related, adding that he could not bear to see his father in a difficult situation. It was the picture of a son helping out his father who had fallen on hard times.

Speaking to the Inquirer about the roots of the dispute, Reghis and his younger son, Nathaniel, tell a different story.

In particular, the elder Romero said that he had been hearing disturbing reports in the time leading to 2012 about his first-born son’s management style and his loose financial ways at the helm of Harbour Centre.

“We hear things from our friends, but we didn’t want to believe them at first,” said Nathaniel, who said he and his elder brother used to be very close. “Sometimes, we would even get upset at our friends who told us bad things [about Mikee].”

Monopoly

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Later that year, Reghis asked Mikee for a report about the condition of the P3-billion breakbulk cargo port facility —a virtual monopoly, which, theoretically, should have no problem showing above-market financial returns on their investment.

“Mikee would always say ‘dad, we’re not making any money’,” Reghis recalled, adding that his eldest son would show the company’s books that exhibited razor-thin net income margins (the percentage of revenues that is left for the owners after all expenses are deducted). “He always says, ‘dad, we only made 5 percent’.”

At this point, the father intervened and retook control of the company, replacing key officials and filing complaints for qualified theft against some who were loyal to his son—a boardroom coup that Mikee said was executed deceitfully while he was on a business trip overseas.

“What we didn’t know was that there were a lot of anomalies under my brother,” Nathaniel said. “To this day, we’re still uncovering anomalies. Ang dami. (There are many.)”

Reghis showed the Inquirer a three-inch this file of photocopied checks, two to a page, paid out to “National Food Authority and/or Felicia Aquino”. All told, the checks—made out for P200,000 each, with Mikee supposedly as one of the signatories—totaled P400 million.

“P200,000 is their check issuing limit [without having to secure board approval]. And why is it payable to NFA and/or Felicia Aquino? Aquino is the [company] cashier and reports to Mikee,” Reghis said, adding that all the checks were encashed by Aquino and, he suspected, funneled back to his son for his personal use.

More details about supposed anomalies emerged after Reghis’ group sued the company’s corporate secretary, Mario Saycon, who was installed by his son, for perjury and falsification of public documents. According to the elder Romero, Saycon promptly switched sides and revealed that he was not really a corporate secretary but a mere restaurant waiter who was told to sign documents for a fee.

“He admitted to us that he knew nothing about these things. He said he was just asked to sign [the corporate papers] by a female lawyer,” Reghis said.

Missing funds

All told, the father claimed that Mikee has to account for some P1.1 billion worth of cash and assets that either went missing from the company’s books or were “misspent” during his son’s nine-year stint at the helm of Harbour Centre.

Visibly upset by his father’s accusations, an exasperated Mikee denied signing checks for Harbour Centre and plundering the company for his own personal gain.

“Harbour Centre is my baby. I founded this company. I built it up. The ports business is my life. Why would I do this to my own company?” he asked, shaking his head. “Everything my father is telling people is the polar opposite of the truth.”

He also clarified that accusations of his supposed high living were unfounded as he had bought a private jet (used for his mining operations) and paid for a polo team using his own funds, and not company resources, as his father had suggested.

Mikee said his father’s claim that he plundered Harbour Centre of some P1.1 billion in resources was impossible since the company was founded in 1996 with only P5 million in paid-up capital, which only ballooned to P2.1 billion in 2001 when government-owned land was injected, thanks to a joint venture deal with the state-owned Home Guaranty Corp.

“Everything else was just complicated financial engineering which I did,” Mikee said, adding that he relied on skills he learned from his years in Singapore where he structured investment deals and consequently earned his first P100 million at the age of 30.

The younger Romero insisted that he had fully paid his father the sum of P300 million in 2004 for the latter’s entire stake in the disputed company and that the transaction had long been perfected, with ownership consequently passing to the son.

“And now he want’s money. He wants me to pay him just to stop all this. He told me so,” Mikee said.

Just how much is Reghis supposedly demanding for his son to be able to buy peace?

“He wants P1 billion,” Mikee said, again shaking his head in disbelief. “I offered him P500 million—not for his stake in the company, because he no longer has any—but just to end this. He said this was too low for all his ‘perjuicio’ (trouble).”

“I’ve saved him so many times. When he was kidnapped [by the Abu Sayyaf from a Palawan resort in 2001], I helped resolve that,” he said. “I can’t believe he could do this to me.”

Court cases

The father-son dispute is now the subject of several court cases filed at various levels of the judiciary, all the way to the Court of Appeals, which had recently stopped the lower court decision that would have restored Mikee to the helm of Harbour Centre.

The younger Romero has had more success with the lower courts, where at least five complaints against him and his allies have been dismissed by the prosecutors of Taguig, Navotas, Makati, Quezon City and the Department of Justice.

At this point, it is clear that the dispute can only be resolved through a bruising legal battle—hopefully before the adverse effects spill over into the operations of a firm whose operations are vital to the local economy.

“There are special rules governing intra-corporate disputes, which are intended to decide on a controversy in a speedy fashion,” said Accra Law Office managing partner Francis Lim. “This is in recognition of the fact that businesses are the engines of the economy, and disputes among shareholders must be speedily decided for the good of the company and its stockholders, employees, creditors and other stakeholders like the community and the state.”

However, Lim, who is an expert in corporate dispute resolution, highlighted the difficulty of resolving the Romero family dispute that, on its third year and running, is entering a new phase as the battle shifts to the courts. The Philippines is still a relatively small business community and even lawyers are reluctant to take sides when both parties are high-profile businessmen.

“I inhibited myself from handling the dispute because father and son were my clients,” he said. “It’s a pity, and I’m keeping my fingers crossed that they will reconcile soonest.”

At the rate accusations and counteraccusations are flying between both parties, the case will almost surely be elevated to the higher levels of the judiciary—and a father-son reconciliation may be wishful thinking at this point.

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TAGS: Business, corporate dispute, harbor centre port terminal inc., r-11 builders, reghis romero ii
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