Biz buzz: Rising from the ashes | Inquirer Business

Biz buzz: Rising from the ashes

/ 12:36 AM November 25, 2016

Before joining President Duterte’s official family, this former politician was widely known in his home province to be in dire financial straits.

Having failed in his bid for a national elective post a few years back, this politico was said to have spent all his family’s wealth in pursuit of his elusive political dream. It even allegedly led to strained marital relations.

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Adding to his woes was an adverse report of the Commission on Audit about P3 million in missing funds from the provincial coffers. The string of bad luck didn’t seem to end.

But barely two weeks upon assuming his new post, this official became the talk of the town. Like the proverbial phoenix rising from the ashes, the politician suddenly became liquid. He reportedly visited the capitol—P3 million check in hand—offering to settle the missing funds uncovered by state auditors.

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Thus, from being nearly a pauper before his sudden reversal of fortunes, this official was suddenly awash with cash. Insiders from the agency he now leads could only shake their heads in disbelief. In his first few days in office, the new boss allegedly started meeting everyone except legitimate industry stakeholders under his agency’s supervision. How’s that for starters?

Industry players view this with grave concern. It’s bad enough that they haven’t met their new regulator, what’s worse, they say, are rumors that this official is chummy-chummy with a giant foreign multinational with an unsavory reputation of corrupting government officials in the markets where they operate.

Worried businessmen can only hope that President Duterte would closely monitor the activities of this official who oversees a very important government function. —Daxim L. Lucas

Backbiter bitten back

They say that “loose lips sink ships,” but the talk of the town among insurance industry players nowadays is how “loose lips lost an airline.”

Up until recently, one of the country’s top non-life insurance companies held a local aviation account that it had built and nurtured for almost 20 years. For this particular account, the insurance firm relied on a UK-based firm to broker its reinsurance placements.

During the last year of its contract, however, the insurance firm informed the reinsurance broker that they would no longer be using their services. So how did the broker respond? Apparently, by going straight to the owner of the aviation company, and sowing intrigue by furnishing him with complete details of their reinsurance transactions.

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The narrative that was sold to the airline executive was that the insurance firm was overcharging them, and they had the numbers to prove it. Not to worry, of course, since the broker suggested another company who could handle the airline’s insurance needs. Conveniently (predictably?), this recommended company just happened to be doing business with the broker.

However, the broker two glaring mistakes. First, the insurer was not overcharging the aviation firm, since the figures they used to rile up the owner of the airline did not take into consideration the huge taxes imposed on the insurance firm. Second, and more importantly, the broker had absolutely no right to disclose the highly confidential figures to anyone, much less for the purpose of besmirching another company’s reputation.

Not surprisingly, the insurance firm did not take this sitting down. They have sued the broker in the UK high court for breach of confidentiality, and are not done yet. Very recently, they hired high-profile lawyer Bong Bernas to pursue the case under Philippine jurisdiction, with the intention of throwing everything including the kitchen sink at the foreign reinsurance broker. It is said that the lawyer has reason to believe that this broker’s Philippine unit is conducting business without a proper legal license, casting doubt on all of its transactions. For a company that specializes in risk-assessment, it appears that this broker failed to evaluate this situation very well. —Daxim L. Lucas

King troll

Could it be that Deputy Cabinet Secretary Peter Tiu Laviña is cultivating a troll farm inside the Malacañang compound?

This naughty thought has crossed the minds of some Palace employees who have been wondering why Laviña has such a big office at the Mabini Hall.

To those unfamiliar with Malacañang terrain, Mabini Hall is the four-storey building adjacent to the St. Jude Catholic School campus along J.P.Laurel Street, in San Miguel, Manila.

The size of Laviña’s office on the third floor of that building suggests not that of an ordinary deputy’s but someone on the level of a Cabinet secretary, according to one employee. Since Laviña is a deputy, what for does he need an office big enough to host a 20-seat call center?

By the way, Laviña is also concurrent head of the National Irrigation Administration (NIA), which has its own office in Quezon City.

But wait till you see the office of Laviña’s boss, Secretary to the Cabinet Leoncio  Evasco Jr., on the fourth floor.  Not even long-time Mabini Hall employees have seen such a big office for a Secretary to the Cabinet. But then, as the Du30 campaign promised change, so change must come… whether you like it or not, folks. — Fe Zamora

Slaying corruption

It looks like current administrators of the Philippine Amusement and Gaming Corp. (Pagcor) are bent on running after corrupt officials in the agency during the previous administration.

Following President Duterte’s mandate to end corruption to attract more investments, Pagcor officials are reportedly readying cases against corrupt officials who allegedly demanded huge sums in exchange for regulatory approvals.

Biz Buzz sources say that of particular interest are former Pagcor officials who allegedly fleeced millions—if not billions —from big investors, exchanging license approvals for favors like “endorsements” of local contractors for the construction of multi-billion casino projects.

Investigating the activities of past Pagcor officials has become a priority now that several gaming projects are about to go online.  Okada Manila, for example — the third mega casino project inside Entertainment City — is rushing to open soon. Other projects in the pipeline are Solaire’s P20-billion casino in Quezon City; Travellers International’s Westside City Resorts World in Entertainment City;  Clark SunValley Resorts and Country Club project; and several others.

Prosecuting corrupt officials is a way of sending a strong message to investors behind current and future gaming projects that the Duterte administration will not condone irregularities in any government agency and will not tolerate harassment of investors.

Watch this space people as we report updates on this anti-corruption drive inside the gaming agency. — Daxim L. Lucas

Gozon’s baggage

It’s not wise to mess with GMA Network chair and CEO Felipe Gozon and his luggage.

Gozon a few years back sued Dubai’s Emirates Airlines for the botched handling of his bags, which apparently arrived much later than the local media tycoon/lawyer, following a lengthy 37-hour series of flights from Manila, Dubai, Rio de Janeiro and Santiago de Chile.

Gozon was traveling with his entire family, including grandchildren, for a South American cruise. Sounds idyllic, until things went awry.

It started when the Gozons, for the Rio to Chile leg, switched from Emirates to a connecting flight by Linea Aerea Nacional de Chile. They arrived in Chile and proceeded to the baggage claim that turned out into a multi-hour wait. Gozon’s bags, apparently, were not on board the plane. Thus followed promises to deliver the bag, only to fail on those pledges. Gozon arrived in Chile on Dec. 20, 2013, and at one point, he was told the bags would arrive on the 22nd, or after the boarding date for the family cruise.

The bags were delivered eventually, of course, but not before causing the GMA chief a lot of distress.

Court filings detailed how Gozon did some spur-of-the-moment shopping for essentials since the bags contained his clothes and prescription medicines. Equally crucial was that his bags contained the battery charger for Gozon’s “Nokia cellphone.” The filings noted that he was expecting calls from “prospective investors” looking to buy shares in GMA. Perhaps, the tipping point was when Gozon apparently bought a return flight to Manila, causing distress especially among the youngest members of the family.

In any case, some “good luck” came when the bags were delivered before the cruise, and presumably the vacation continued. The angered Gozon still sued Emirates for breach of International Carriage contract. A Makati trial court recently said the airline had erred.

It’s a pretty pricey lesson, too, even if Gozon didn’t need the money. Emirates was fined P2.5 million in moral and exemplary damages and an additional P100,000 plus “costs of suit.” —Miguel R. Camus

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