After a tumultuous reign that spanned a few years, the president of a government-run (though not necessarily owned) financial institution—which we shall call “Bank U”—has finally been shown the door, courtesy of the Palace.
According to our source, this bank president—whom we shall call “Mr. C”—was ordered replaced by the powers that be after a copy of an internal audit report reached the higher-ups a few days ago.
Among other findings, the internal audit found that Mr. C gave the green light to some expenses without going through the requisite board approval route (one such expense supposedly involved hiring a close relative to do interior decoration work for Bank U).
To some extent, Mr. C’s impending departure came as no surprise to some members of the board, some of whom were horrified a couple of months ago when he made a candid admission about a certain questionable “legal expense” the bank had incurred.
According to our source, Mr. C’s close ties with the head of the agency supervising Bank U did not help this time, like it did during the last contentious boardroom battle earlier this year.
The thing is, Mr. C has supposedly appealed to higher-ups to let him stay on until December. We wonder why.
Mr. C’s replacement will be a certain Mr. JK, himself a former Bank U chair and widely respected in the industry.—Daxim L. Lucas
Yosi the consolidator
After acquiring AIG’s local healthcare and pre-need businesses (and recently investing in a cloud-computing enterprise), investment banker and stock broker Eusebio “Yosi” Tanco is continuing his strategy to grow through acquisitions.
Tanco, who also leads port operator Asian Terminals Inc. and STI Colleges, is in the thick of negotiations to acquire ATR KimEng Financial group’s insurance unit AsianLife. The discussions are now in an “advanced” stage, a source privy to the matter said.
This could be part of a realignment by Malaysian banking giant Maybank, which now controls ATR KimEng, and seems more focused on Philippine banking and capital markets businesses (and this while Maybank’s stiff rival in its home country, CIMB, is coming to town).
This potential merger and acquisition will add a leading life insurance portfolio to Tanco’s growing empire. His Philippine First Insurance Co. Inc. is the country’s 12th-biggest non-life insurer with assets of P1.8 billion. The AsianLife group (through Asianlife Financial Assurance Corp. and Asianlife General Assurance Corp.), for its part, has combined assets of about P2.4 billion. It’s uncertain whether both will be acquired by Tanco, but he definitely isn’t a stranger to AsianLife Financial, where he was once a board member.
By the way, if Tanco buys AsianLife, he may also get some “pogi” points as this group is the official insurer of the much-beloved Philippine Azkals, a privilege (and responsibility) that any insurer will be happy to assume.—Doris C. Dumlao
Trouble brewing
Apparently, it’s not just about power sector issues that members of this large business group are not seeing eye to eye. According to reliable sources, some members of the influential organization—known to be supportive of any sitting administration—can’t wait to have a change in leadership.
This business group will have its elections in December and the current president is not expected to reprise his role as man on top, who is, by default, the organization’s face and mouthpiece. Some members have allegedly expressed dissatisfaction over his leadership style, especially the way he makes grand promises to anyone and everyone.
But this president is not one to be relegated to the sidelines. Even with his impending replacement as the organization’s head, he is said to be eyeing a key position—possibly even the presidency—at a recently formed business organization representing Chinoy businessmen. The group is composed mostly of immigrants from mainland China and is said to possess even stronger ties with the Chinese Embassy than any of the thousands of Chinese associations in the country.
Before ascending to power at his current organization, this president headed another group of Chinoy businessmen, which also suffered from a lot of in-fighting and power struggles.—Abigail L. Ho
Sharp reactions
Last Monday’s Biz Buzz item about the collapsed Abaton bridge in Calapan, Oriental Mindoro, drew sharp reactions from some who were appalled by the structural and design defects of some of the country’s critical bridges.
For one, a congressman from Oriental Mindoro allegedly called the attention of the director of the Special Bridges Project Management Office (PMO)-Department of Public Works and Highways to repair the bridge and bring it up to agreed specifications. (More than a year has passed since the defects were discovered, but the unused bridge remains in a state of disrepair.)
Constructed by an Austrian firm, the Abaton bridge collapsed under its own weight due to alleged failure of design and project mismanagement, which allowed short bored pile lengths to be used. The District Engineer’s Office allegedly built the bridge according to the design approved by the DPWH official’s office.
Among the suppliers involved in building bridge projects under the office of this DPWH director are the Austrian supplier and another British bridge contractor. In previous CoA performance audits, both the Austrian and British suppliers were found to have incurred cost overruns for their respective projects by 44 percent and 86.6 percent, respectively.
Despite huge cost overruns, the bridges were completed, but are allegedly structurally unsound. Will the DPWH step into this mess before the lives of taxpayers (whose funds shouldered the projects) are put in grave danger?—Daxim L. Lucas
Security Bank powwow
Continuing its tradition of bringing in noted financial and economic experts from abroad, Security Bank will host another edition of its well-attended economic forum series on October 26 at Makati Shangri-La Hotel.
This time, the event’s main draw will be the global economist of Wells Fargo Securities Jay Bryson, European Chamber of Commerce in the Philippines president Hubert d’Aboville and Anton Periquet of Deutsche Bank.
Bryson provides analysis on financial markets and macroeconomic developments in major world economies. His credentials include a stint with the US Federal Reserve Board and regular appearances on CNBC and Bloomberg TV.
Given his credentials, it should be interesting to listen to his take on the present state of things in the country.—Daxim L. Lucas
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