Cha-cha in Wack Wack

A heat wave has swept across the greens of Wack Wack Golf and Country Club (despite the rainy season) as the board and some irate members debate over proposed amendments to the club’s by-laws. In a nutshell, there’s a move to consolidate fund-raising and capital allocation authority into the board as the club seeks to shore up its ranking among peers in the metropolis.

One amendment sought is to transfer to the board the power to enter into lease contracts as deemed “beneficial to the club,” thereby doing away with the current requirement that two-thirds of proprietary members must consent to these. The board sees the current vote requirement as impractical, if not difficult to obtain, especially if it involves only ordinary and short-term lease agreements.

Opponents warn, however, that this amendment grants the board with “too much discretion” and “for an unspecified period of time” and may go beyond the simple leasing to barbershops or bake shops. Such empowers the board to lease the club’s real property even if such lease is not ordinary and necessary for golf operations so long as they believe it is beneficial to the members, said a position paper by opposing members. “Who decides what is beneficial to the members? Who approves a lease that could last 20 or 25 years covering not only a portion of our property, but possibly the entire property of the club?” the paper asked.

Another amendment seeks to delete a provision saying that the board “cannot incur an indebtedness or obligation in excess of P1 million, unless it is for capital improvements, in which case the ceiling is 5 percent of the total gross receipts for the immediately preceding year.” This is sought to be replaced with a provision stating that the board can “allocate capital expenditures as it may deem necessary for the maintenance, repair, improvement, expansion or enhancement of the club’s golf courses, clubhouse and other facilities. This is provided that, if the board approves an increase in excess of 25 percent of the amount originally budgeted for a single project, it should inform proprietary members. Opposing members warn that this tramples on check-and-balance and gives the board a “license to become whimsical and frivolous.”

Outside of money matters, another proposal involves adding “disorderly behavior or conduct unbecoming of a member or any of his dependents and guests or acts that are deemed inimical to the interest of the club” among the just causes for suspension. Another seeks to delete arbitration provisions.

Legal observers familiar with the issue note that it is all a question of “trust” and the question is whether the board can get enough of it from among the members.  Doris C. Dumlao

APO on ‘daang matuwid’

Amid allegations of irregularities in its procurement of specialized printing machines for the production of “accountable forms” of various government agencies, officials of APO Production Unit Inc. have defended the company, saying that their actions were all above board and transparent.

APO—a unit of the Presidential Communications Operations Office—said the decision to lease the printing machines (instead of buying them outright) was due to the fact that the firm’s finances were ravaged under the previous administration and it could afford to only lease new equipment at this point.

In addition, APO chair Mila Alora said the printing equipment that the company would lease may or may not be brand new as long as these comply with the rigid standards set by the firm for the equipment. APO also deflected allegations that the contract for the rotogravure machines—to be used initially to print BIR excise stamps—would cost P600 million for the remainder of President Aquino’s tenure because the bidding project is only for a one-year contract.

More importantly, Alora pointed out that APO has been losing money for the last 10 years due to mismanagement, but turned a corner soon after new officials were appointed under the Aquino administration. Going forward, APO is angling to secure the printing contract for Philippine passports (currently held by the central bank) and other official forms estimated to be worth a combined P4 billion a year.

APO suspects that the attacks were coming from either members of its employees’ union (who may have been upset by the shakeup imposed by the new board) or by a losing bidder for the printing machine contract.  Daxim L. Lucas

But critics wonder…

APO’s critics refuse to be silenced. One group, in fact, wonders why the winning bidder for the printing machine contract—a certain firm called United Graphics—has cash on hand of only P9 million, while its total debts stand at close to P1 billion.

They insist that, for APO’s purposes, new machines (rather than refurbished ones) must be used, since the firm is inexperienced in operating new printers. APO’s unfamiliarity with the machines may cause frequent breakdowns which would, in turn, lead to losses in tax revenues for the government (since it’s meant to print excise tax stamps).

APO’s critics also allege that the printing machines that the winning bidder plans to supply are overpriced. “A new machine would cost only 1.2 million euros. This is its list price,” the source said. “With some haggling, it can be bought for 900,000 euros. The local representative office is based in Makati. It’s easy to get a quote for a brand new rotogravure press from them.”

Most rotogravure machines in the Philippines are from either China and Taiwan. They are used to print eight-color plastic food packaging and tobacco packaging, compared to BIR excise stamps which are printed on paper with two colors.

In the fight over P4 billion worth of government printing contracts, expect more controversies.  Daxim L. Lucas

Bludgeoned

Shares of SM Investments, the country’s most valuable company, slumped on Friday to a level below the already discounted price (P900 a share) at which the conglomerate sold shares through a $150-million private placement. Its share price slipped 8.58 percent to P879, dragged down by about P765 million in net foreign selling.

Stock market sources said some investors dumped SMIC shares because they were irked at not having had the opportunity to buy at the P900 a share last week, while others were unhappy to see existing shares suddenly marked down because of a fund-raising that was not too compelling. “Is it worth it for SMIC raising a small amount but its stock being bashed down?” one veteran stock trader remarked.

Despite Friday’s decline, SMIC has so far remained as the country’s most valuable company with a P758-billion market capitalization against nearest rival PLDT’s P656 billion (the telco’s share price was up 1.18 percent on Friday).  Doris C. Dumlao

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