Manny V. Pangilinan pins down Roberto Ongpin

The grand inquisitor believes he has the smoking gun.

According to Sen. Sergio Osmeña III, he has obtained an affidavit from businessman Manuel V. Pangilinan that will nail the “insider trading” case that he has been building against businessman Roberto “Bobby” Ongpin, whom he accuses of buying the Philex Mining Corp. (Philex) shares of the Development Bank of the Philippines (DBP) with P510 million in alleged “behest” loans from the DBP itself.

Ongpin is also accused of allegedly using insider information to corner the market on Philex shares—including those owned by the DBP—which he immediately turned around and sold to Pangilinan at a hefty profit.

Osmeña, who chairs the Senate committee on banks that is conducting the investigation into the alleged financial chicanery, said the Pangilinan affidavit pointed to a case of insider trading in relation to another transaction that Ongpin had made in December 2009.

“It will prove (insider trading) with another transaction Bobby Ongpin made on Dec. 2,” Osmeña told Inquirer editors and reporters at a recent dinner.

Insider trading is the trading of a corporation’s stock or other securities by individuals with potential access to nonpublic information about the company.

‘Tell the truth’

Osmeña said he got hold of the Pangilinan affidavit at the end of October, or some three weeks after the Senate started its investigation into Ongpin’s DBP loans and purchase of the bank’s Philex shares in 2009.

He said more information, including the Pangilinan affidavit, will be made available in the next hearing, which has been set for Tuesday.

According to Osmeña, it was Senate President Juan Ponce Enrile who convinced Pangilinan to execute the affidavit to shed light on the questioned transaction.

He said Enrile did not force Pangilinan to testify against Ongpin, but simply to “tell the truth.”

Enrile confirmed this but described the Pangilinan document as a “factual statement with no conclusion.”

Price agreed

Asked if the affidavit would prove that Ongpin had engaged in insider trading, Enrile smiled and said: “We have other evidence. I just can’t discuss (them).”

According to Osmeña, Pangilinan admitted in the affidavit that he and Ongpin had already agreed a price with which Ongpin would sell his 50 million Philex shares in late 2009. Ongpin earlier bought those shares from the DBP at P12.75 per share, using a second loan worth P510 million from the government bank. He had also taken out a first loan of P150 million earlier that year.

Ongpin sold the Philex shares he had bought from DBP, along with other Philex shares he had acquired, as a block to the Pangilinan at P21 per share. The sale allowed Pangilinan to gain control of Philex, the biggest gold and copper mining company in the country.

“He (Pangilinan) gave us the date. He gave us the place and he gave us the price,” Osmeña said.

Shangri-La meeting

According to Enrile, the Pangilinan affidavit said that Ongpin was initially asking for P27 per share before he and Pangilinan agreed on P21.

He said the agreement came before Ongpin took out the second loan of P510 million from DBP in November 2009. “It was before the actual sale,” Enrile said.

Still quoting from the Pangilinan affidavit, Osmeña said Ongpin’s nephew and right-hand man, Eric Recto, had contacted Pangilinan sometime between Nov. 10 and Nov. 15 for a meeting that was “nothing extraordinary.” The meeting took place at Shangri-La Hotel in Makati.

He said Pangilinan and the Ongpin group started talking on Nov. 24 and by the end of the week, Nov. 27, a Friday, they had decided on a price of P21 per share.

“It only started when Eric Recto called him (Pangilinan) up (and said), ‘Sir, can we talk to you about selling our block?’” Osmeña said.

David knew?

Osmeña claimed that the then president of DBP, Reynaldo David, knew of the supposed Ongpin-Pangilinan agreement before the purchase actually took place.

David, who sat on the Philex board with Ongpin and Pangilinan at the time, denied this in previous Senate hearings.

Osmeña said copies of the minutes of “several” board meetings would debunk David’s denial.

“The minutes of the board meetings of the DBP hangs David. They discussed it (the price). He (David) even said, ‘You guys line up. I’m ready for consulting.’”

Despite Pangilinan’s admitting what he is supposed to have admitted in his affidavit, Osmeña said there was no need to summon him to the Senate hearings. He said the businessman did not necessarily implicate himself because “he was (just) the buyer.”

“He was the one who established the price. That’s not insider trading because he did not gain from the information. As a matter of fact, he was the one who gave the information. It was the other guy who sold,” the senator said.

As to why Pangilinan would agree to buy the Ongpin’s Philex shares at P21 each when they were acquired at only P12.75 per share, Osmeña said: “Every investor has a way of looking at things. Mahaba ang pisi ni MVP (His resources are enormous).”

“He’s got a big cash flow coming from PLDT (Philippine Long Distance Telephone Co.) alone of about P60 billion to 70 billion a year and he has to invest. And he knows he can hold it for 100 years. He’s not under pressure to sell,” Osmeña said.

Why not Lopez loans

Osmeña also denied that he was targeting Ongpin while ignoring the fact that the DBP had written off P1.67 billion in loans that the state bank had made to companies controlled by the Lopez family. Osmeña is married to a Lopez.

“I’ve never been asked to probe the Lopezes (but if asked,) I would probe (the matter),” he said.

“As a matter of fact, so I won’t be accused of bias, I would let my vice chairman (Sen. Francis Escudero) conduct the probe,” he said.

Osmeña said his committee began investigating the DBP loans extended to Ongpin because of a resolution filed by Sen. Panfilo Lacson to investigate the suicide of a DBP lawyer named Benjamin Pinpin. It has been alleged that Pinpin had been harried by the new Aquino-appointed DBP board into executing an affidavit to show that David and the old DBP board had irregularly extended the loans to Ongpin.

The DBP’s new board of directors has claimed that the loan to Ongpin was “behest” because it was allegedly granted with “undue haste” and without sufficient collateral cover.

It also accused David and the old DBP board of putting the bank at a disadvantage for selling the DBP’s Philex shares at P12.75 when Ongpin sold the same shares a few days later to Pangilinan at P21 per share.

After three hearings, the committee has barely tackled the matter of Pinpin’s suicide.

First posted 12:43 am | Sunday, December 4th, 2011