Osmeña’s evidence can’t establish insider trading, says Ongpin lawyer
A lawyer of former Trade Minister Roberto V. Ongpin refuted on Wednesday allegations of insider trading that cropped out in relation to the Senate probe of transactions conducted by the state-owned Development Bank of the Philippines (DBP) during the Arroyo administration.
Ongpin’s lawyer, Alexander Poblador, in a press statement, welcomed Senator Sergio Osmeña III’s admission that Manny V. Pangilinan’s affidavit about his purchase of the group’s shares in local mining blue chip Philex Mining did not at all establish any insider trading on Ongpin’s part.
“We take strong exception, however, to his latest claim that SEC (Securities and Exchange Commission) Chair Teresita Herbosa’s September 14, 2011 letter to the Senate supposedly proves that Mr. Ongpin committed insider trading. Nothing can be farther from the truth,” Poblador said.
Still ongoing
“Herbosa made no definitive finding and in fact categorically pointed out that the SEC’s investigation is still ongoing,” Poblador said.
Herbosa’s letter said Ongpin “may have committed insider trading,” adding that the same report had been endorsed to the SEC’s enforcement and prosecution department on Oct. 12, 2010. But the letter said further investigation would require up to two years depending on the circumstances and the findings in the course of the probe.
The SEC chief promised in the letter, addressed to Senate President Juan Ponce Enrile and dated September 14, to conclude the investigation “in the soonest possible time.”
A check with the SEC showed that no conclusive finding had been forwarded to the SEC en banc as of press time. SEC Secretary Gerard Lukban said that while an investigation was ongoing, the SEC’s proceedings were supposed to be confidential.
Poblador said Ongpin had made it clear that when Goldenmedia bought 50 million Philex shares from DBP on Nov. 5, 2009, the businessman had not yet reached an agreement to sell those Philex shares to Pangilinan at P21 each.
Pangilinan-led First Pacific Co. Ltd. of Hong Kong cemented control of Philex in 2009 after buying shares from Ongpin and DBP.
Ongpin is being accused of insider trading—the use of material information not yet disclosed to the public to make a profit or avoid a loss—for buying additional shares of Philex before the closing of the deal.
No such agreement
“That no such agreement had existed as of Nov. 5, 2009, is in fact confirmed by Manny Pangilinan’s own claim in his affidavit that such an agreement came about only several weeks after Nov. 5, 2009. Now Senator Osmeña claims that Mr. Ongpin committed insider trading when Goldenmedia bought another 49 million shares at P19.25 per share on Dec. 2, 2009 a few hours before he signed an SPA (share purchase agreement) with Mr. Pangilinan at P21 per share,” Poblador said.
The lawyer said that implicit in this new allegation was that:
When Goldenmedia bought the 49 million shares on Dec. 2, 2009, there was already an agreement between Ongpin and Pangilinan for the former to sell to the latter Philex shares at P21.
The agreement was material information within the Securities Regulations Code which should have been disclosed by sellers of the 49 million shares.
“Neither of these is true. There was no agreement between Mr. Ongpin and Mr. Pangilinan until the SPA between them was signed,” Poblador said.
While there was an “agreement in principle” reached before Dec. 2, 2009, on the price of P21 per share, Poblador said that this was tentative as it still depended on the outcome of negotiations on other key terms of the agreement, such as payment terms and number of shares.
“Negotiations on these key items continued up to December 2 and on the evening of that day, a final agreement was reached on all key elements of the transaction and a share purchase agreement was signed by all parties that evening. When Goldenmedia bought 49 million Philex shares earlier that day, the agreement with Mr. Pangilinan did not yet exist,” the lawyer said.
Skillful deal
Poblador said the agreement did not amount to material information because any information that an insider should disclose referred to something that the person acquired as a result of his relationship with the company. The lawyer added that the information must relate to a business or purpose of the company.
Poblador contended that the agreement between Ongpin and Pangilinan for the sale of Philex shares at P21 each could not be characterized as material information “because it was the offshoot of skillful and private negotiations between the two as investors and businessmen which eventually led to a binding agreement on the price at which one was willing to sell and the other was willing to buy.”
“It was not information that Mr. Ongpin gained or came across as a director or shareholder of Philex but information which he and Mr. Pangilinan created when they agreed on it. It was not information intended to be available only for a corporate purpose; it was intended for the personal benefit of Mr. Ongpin and Mr. Pangilinan,” Poblador said. Doris C. Dumlao
