Biz Buzz: PSE time warp

With much fanfare, it was announced that no less than President Aquino would ring the opening bell at the Philippine Stock Exchange in Makati City Tuesday to celebrate the PSE index’s historic climb past the 5,000 mark.

Thus, everyone was excited to witness the event at the Ayala Tower One trading floor, including several of the country’s captains of industry. As the bell ringing time of 9:30 a.m. approached, everyone was there—businessmen, bourse officials, journalists—except the President and his party (usually, VIP guests for the ceremonial bell ringing, including past Presidents, arrive by 9 a.m. for some cursory speeches and photo opportunities).

As the clock ticked toward the market opening, many of the PSE brass exchanged nervous glances and tried to figure out how to manage things in case the President was late.

Minutes later, President Aquino walked into the trading floor to the strains of the traditional Mabuhay March, and the emcee promptly announced the usual countdown toward the opening bell, which was then rung vigorously.

Well and good. Except for that one minor detail: trades had actually started flashing on the PSE’s electronic board and across television ticker tapes—on time at 9:30 a.m.—about five minutes before the President rang the bell. Reminds us of that Erap era saying: “The President is never late. The others are early.”

So it’s not just the index crossing above 5,000 that was a first. Ringing the bell after market opening also was. And the stock market? It dropped Tuesday. The same thing happened after the President last rang the PSE opening bell on Sept. 14, 2010.—Daxim L. Lucas

PSBank witness in cyberspace

Philippine Savings Bank president Pascual Garcia, a key witness in the Senate impeachment hearing on Chief Justice Renato Corona, has turned to cyberspace to let the public know about the “human side” of the historic proceedings from the point of view of a banker/witness.

“I want to give some details about the process, which some didn’t know and therefore couldn’t appreciate, why we didn’t disclose and then eventually did. I also wanted to share some personal experiences, which many people ask me about, like how it feels to sit down in the witness chair, what happened before and after each testimony, how did we prepare etc.,” Garcia tells Biz Buzz.

Garcia’s blog (Pascualgarcia.ph), which carries the tagline “In My Own Words,” has three entries so far, the first of which was dated March 3. The latest entry dated March 5 explains why he started such blog. “… there are so many details that while not secret, are not available to the public—the difficulties we had to go through and the experiences we had. Many things happen behind the public’s eye. After receiving feedback from private citizens, I became aware that some portions of the process are not clear. So I want to help give an insight as to what was really going on from our perspective, so that maybe some portions of the public would appreciate this process in an expanded light.”

The blog also sums up PSBank’s steadfast position when the Senate was pushing for disclosure on Corona’s foreign currency deposit unit accounts. “We’re not hiding anything. We’ve always believed that the facts, honestly presented, will always keep us in good stead. We want to provide the court with everything they ask for, provided that it is within our bounds to provide it.”—Doris C. Dumlao

Sweetheart deals?

Businessmen from the Clark Freeport Zone in Pampanga are wondering why outgoing Clark Development Corp. president Felipe Antonio Remollo is still supposedly approving contracts even after he has already resigned.

According to our source, among the recently approved were lease agreements for a hotel casino and a gasoline station along M.A. Roxas, one of the main highways in the Freeport zone.

Aside from the fact that his resignation was already accepted by President Aquino, the contracts appeared to be extremely generous to the government’s disadvantage, our source said. The hotel-casino contract was supposedly leased at only $0.60 a square meter a month. The site is a prime corner lot with a scenic view of the Mimosa golf resort.

A similar contract near the area was signed about four years ago at the same rate of $0.60 a sqm a month. The lease agreement for the gasoline station was only leased at $0.40 a sqm a month.

The going rate for those areas at the freeport zone is above $1 a sqm a month, our source said.

Political leaders from the opposition are now said to be waiting for the ratification of these lease contracts by the BCDA in its stockholders’ meeting scheduled this May. We’re guessing they will officially secure copies of these contracts after these have been perfected by CDC. Looks like another investigation is coming up.—Daxim L. Lucas

LMG/Chemphil chair’s rejoinder

LMG Chemicals and Chemical Industries of the Philippines chair Antonio Garcia has issued a rejoinder to his estranged brother Ramon’s challenge to put under oath any complaint against Diversified Securities Inc. (DSI) and reference to Antonio’s attempt to commit corporate fraud as well as lack of authority/shares in 3G Holdings (one of LMG’s stockholders) and A2K Holdings (one of Chemphil’s stockholders).

Antonio, who is currently out of the country, said in an e-mail to Biz Buzz that his brother was “totally confused and disoriented” as he himself had never gone to the Philippine Stock Exchange to say that DSI lacked the authority to dispose of the disputed LMG shares. The major shareholders of LMG are Chemphil (74 percent) and 3G Holdings (26 percent), he noted. “It is irrelevant whether I own shares of 3G or for that matter even Chemphil.”

“The point is the owners of the LMG shares are these two corporations and it is the officers that have filed a complaint,” Antonio said. The same goes for the Chemphil shares, Antonio said, adding it was the majority of these corporations that had filed a complaint with the PSE against DSI “for illegally sequestering part of the shares and disposing them.”

As to the reference to him attempting to commit corporate fraud (by getting a subsidiary of Chemphil to lend money to nominees who will buy LMG shares), Antonio said: “This is irrelevant because the transaction he is referring to never happened.” Antonio said there were “certain internal arrangements” being explored to meet the PSE deadline for listed companies to maintain a 10-percent minimum public float but that because the deadline was postponed, the entire scheme was scrapped. (Ramon’s version was that this arrangement was scrapped only because he had warned that such interest-free and collateral-free lending to virtual strangers was tantamount to corporate fraud). Antonio said he had no role in this because he was no longer involved with management and now only sitting as non-executive chair of these corporations.

“Since when is anyone convicted by the allegation of another party that there was an attempt to commit fraud? I am afraid that DSI better come up with a justifiable reason for disposing shares they were not authorized to because they could be held criminally liable,” Antonio said.—Doris C. Dumlao

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