Is there a Big Man behind Roberto “Bobby” Ongpin?
Sen. Sergio Osmeña, one of the senators probing the allegedly questionable loans granted by the Development Bank of the Philippines (DBP) to an Ongpin company during the Arroyo administration, said there was a pattern of multimillion-peso transactions that pointed to some form of “insider trading” that benefited Ongpin.
But for those transactions to have been made possible, Osmeña said there had to be another person behind Ongpin, whom various media reports and politicians have branded as a friend of Jose Miguel Arroyo, the husband of former President Gloria Macapagal-Arroyo.
“Bobby Ongpin is not big enough to be able to have that kind of information at all and be able to buy those shares at that price,” Osmeña said, speaking to reporters following a five-hour hearing to probe the P660-million alleged “behest loan” extended to Ongpin’s Delta Ventures Resources by the DBP in 2009.
“There had to be a ‘B’ behind the behest,” the senator said.
Ongpin failed to attend the hearing as his lawyer said he was still abroad. The committee was told that the businessman would show up at the hearing after he returns on Oct. 25. The next hearing is set for Oct. 14.
‘Tell that to the Marines’
The inquiry is being conducted jointly by the blue ribbon committee chaired by Sen. Teofisto Guingona III and the committee on banks, financial institutions and currencies, chaired by Osmeña.
Aside from possible violations of banking laws, the Senate is inquiring into possible insider trading and violations of the Securities Code because the loans that Ongpin obtained were used to buy the DBP’s 50 million shares in Philex Mining Corp. at P12.75 a share.
Ongpin later sold the shares, together with the remaining 50 million Philex shares of DBP and others, as a bloc to the group headed by businessman Manuel V. Pangilinan, who paid a premium for the shares to gain control of the country’s largest gold and copper mining firm.
At the time of the sale, Ongpin and then DBP president Reynaldo David were both directors of Philex.
“How lucky Bobby Ongpin was that he bought 50 million shares at P12 (each) and four weeks later, sold them at P21,” Osmeña said sarcastically.
“Tell that to the Marines that he didn’t know that that would be the target price of Manny Pangilinan,” he said.
Petron, Meralco shares also sold
At Friday’s hearing, David admitted the DBP had also sold its shares in Petron Corp. and the Manila Electric Co. (Meralco) to separate companies in which Ongpin was also involved.
David said he and other former DBP officials sold the bank’s estimated P540-million Meralco shares to Global 5000 Investment Inc., another company involving Ongpin, using a three-year extended payment scheme.
David said each share was worth P90 “when the market was doing P57.”
But Osmeña interjected: “Of course, a couple of minutes later, it started transacting at P300 and you gave them three years to pay?”
Under questioning by the senator, David said the sale of the DBP’s shares in Petron Corp. in 2008 also involved Ongpin, who was representing the acquiring party, the UK-based Ashmore Group.
“I would like to congratulate you. The DBP could read these big plays that were going to happen—Meralco takeover, Petron takeover, Philex takeover—and that is the time to make money,” Osmeña told David.
“That’s when the (price of) shares go through the roof. I remember Meralco going from P24 to P100 to P300,” he said.
Osmeña later described the deal to reporters in idiomatic Filipino: “The Filipinos were really being fried in their own fat… it’s like the Ongpin group had nothing but words for capital.”
Got loan fast
Grace Pulido-Tan, the COA chair, told the hearing that the agency’s fraud investigation division was now looking into the possibility that the Philex transaction involved insider trading, an illegal practice involving unfair access to information on securities.
Tan said she had also asked the Securities and Exchange Commission to look into the issue.
“Some form of insider trading, fraud may have happened, which at this point in time we are not saying to be a fact,” she told the committee.
She cited as one indication the “short period of time” with which Delta Ventures Resources was able to secure the loan from the DBP.
Osmeña said there was an “indication of insider trading” in Ongpin’s acquisition of the DBP’s Philex shares. He noted that David also sat on the Philex board at the time of the transaction.
“He should know what’s going on with the Philex activity. In this country, all these things are being talked about though they are not in the record,” he said in Filipino.
“He cannot say that increasing the share position of Manny Pangilinan was not being discussed (in the Philex board). Of course, it’s very hard to prove that they discussed it, but they were together in the board. They met every month,” said Osmeña.
Was it behest or not?
A significant part of the hearing was spent determining whether that loan extended to Delta Ventures Resources could be classified as “behest.”
Solicitor General Joel Cadiz argued that it was, alleging that the second of the two loans (P510 million) lacked sufficient collateral and capitalization, not to mention the supposed haste with which it was granted.
Guingona said the government was also put at a disadvantage. He cited the COA report saying that the DBP would have earned more than P400 million had it not sold the Philex shares to Delta Ventures Resources.
Ongpin has repeatedly denied that there was anything irregular in the loans—P510 million and P150 million—that Delta Ventures Resources secured from the DBP, which accounted for 16.5 percent of the P4 billion that Ongpin borrowed from six financial institutions to finance his acquisition of Philex shares.
He denied the transaction was highly irregular and that the DBP in fact made money from the interest on the loan which was repaid way ahead of its maturity and was fully collateralized and that the DBP had doubled its investment in the Philex shares when they were sold to him.
Charges, countercharges
Various cases have been filed in connection with the deal. The new DBP board has brought charges of graft and banking law violations with the Office of the Ombudsman against 25 past and current DBP officers and three private persons, including Ongpin and David.
Ongpin himself has filed libel and graft charges against DBP chair Jose Nuñez Jr. and president Francisco del Rosario.
Edgardo Garcia, DBP senior vice president and chief operating officer, has filed a complaint in the Office of the Ombudsman against Nuñez for allegedly trying to coerce him and other bank employees into testifying against Ongpin and David during the bank’s investigation into the controversial loans.
First posted 12:11 am | Saturday, October 8th, 2011