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Biz Buzz: No license? No problem!

/ 11:26 PM May 31, 2015

THE P14.3 BILLION in “wash sales” that resulted in a massive P717-million loss for the state-owned Development Bank of the Philippines—yes, that’s P717 million worth of public funds—was initially discovered not internally, but by an external party, we’re told.

Biz Buzz learned that it was the country’s bond exchange, the Philippine Dealing and Exchange Corp. (PDEx) which first raised an eyebrow at the series of DBP trades, all of which were done with First Metro Investment Corp., and all of which were bought back on the very same day they were sold (at a loss, of course).

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We heard that it was actually PDEx which first tipped off the Bangko Sentral ng Pilipinas that something was amiss after monitoring 28 such “wash sales” between DBP and FMIC.

In any case, it gets better.

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Biz Buzz learned from DBP insiders that the bank trader who actually executed the deals was —drumroll, please—NOT licensed to make them.

So if he wasn’t licensed, how was he able to use the PDEx trading platform, which requires each authorized trader to log in their credentials and password before being allowed to access the system?

Well, easily, apparently. This trader simply used the PDEx login credentials of another DBP trader (one who was authorized to use the PDEx system) and… voila!

When the ordure hit the fan at DBP, an internal probe was conducted. Based on the audit trails conducted by COA (for example, using DBP’s treasury desk manuals, traders’ logbooks and blotters), it was established that it was “Trader RC” (the unlicensed one back then), and not “Trader FR” (the licensed one) who executed the deals.

Of course, Trader RC used Trader FR’s terminal to do it, which makes us wonder how secure PDEx log-in credentials were at the country’s biggest banks.

If one checks with PDEx, it was the name of Trader FR that was on the computerized trading logs between DBP and FMIC from January to March of 2014.

How’s that for resourcefulness? Daxim L. Lucas

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Peripatetic official

AN OFFICIAL of a controversial regulatory agency is literally enjoying the job. Perhaps a little too much, we’re told.

In the guise of consulting “constituents,” this official is always out of the office and often seen frolicking in some of the country’s best beaches. In fact, most of the agency’s public hearings in Manila are often postponed due to the official’s incessant out-of-town trips.

A scion of a powerful political family in Visayas, this official is known in industry circles for demanding “red carpet” treatment whenever out of town.

Hapless hosts whose businesses are under the regulatory agency’s ambit reluctantly fork out huge sums just to please their “unwelcome guest.” They cater to the regulator’s every whim lest pending petitions or cases with the agency are further delayed— or worse, decided against them.

In a remote island-province recently visited by this peripatetic regulator, power was interrupted at least 10 times within the day. But the official didn’t seem bothered by the area’s dismal power situation.

The lack of empathy is appalling since it’s the official’s duty, in the first place, to help ensure power stability.

Hearing rumors that this official is eyeing the coveted chairmanship of a regulatory agency, industry players are storming the heavens with prayer to spare them from this gallivanting “power tripper.” Daxim L. Lucas

Well played

THE CAVITE-LAGUNA Expressway public-private partnership deal is set to be awarded this week and there’s little doubt on who the winner will be.

That is, of course, Manuel V. Pangilinan’s Metro Pacific Investments Corp., which topped rival San Miguel Corp.’s P22.2-billion offer with its own unexpected bid of P27.3 billion.

A lot has been said and written about this deal, from its implications to economic growth, the government’s kitty and who Metro Pacific can possibly partner with.

But we’d like to shine some light into one of their offer’s most interesting aspects—which basically was a blanket decision going up to the very top to not discuss its interest in Calax with anyone else, least of all the media.

Even a week before submitting bids, the businessman couldn’t tell us for sure whether they would participate, let alone do so aggressively. But as Biz Buzz interviewed several Metro Pacific officials, it became clear that the company really was keen on the tollroad to the point that it finally more than doubled its 2014 offer.

The result?

No one—not SMC, the government or bystanders like us—saw that offer coming. Credit, of course, also goes to Pangilinan’s communications strategists and staff. As one senior Metro Pacific official told us, an auction at its heart “really is a game.” Given the result, that’s a round well played. Miguel R. Camus

E-mail us at [email protected] Get business alerts and a preview of Biz Buzz the evening before it comes out. Text ON INQ BUSINESS to 4467 (P2.50/alert)

 

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TAGS: Business, Cavite-Laguna Expressway, Development Bank of the Philippines, economy, News
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