Ongpin on graft raps: Why me?

Businessman Roberto Ongpin on Friday decried as “patently uncalled for and unfair” the Ombudsman’s decision to launch an investigation into the aborted 2009 sale of the Land Bank of the Philippines’ shares in the Manila Electric Co. to a company that Ongpin then controlled.

The former Marcos trade minister also protested that his name was singled out from among 20 individuals being investigated, and questioned why the antigraft agency called a press conference to announce the investigation despite the fact that no charges have yet been filed.

“Why me?” said Ongpin. “This particular transaction didn’t even push through.”

Ongpin said he did not want to ascribe any political motives to the Ombudman’s move against him last week, but conceded that both Vice President Jejomar Binay and Sen. Francis Escudero—two politicians running separately against the Aquino administration slate in next year’s elections—are his “friends.”

‘Sweetheart deal’

The Office of the Ombudsman last week announced that it was investigating Ongpin, his associates and current and former executives of the Social Security System (SSS), Landbank and the Ongpin-led Global 5000 Investment for the alleged P9-billion “sweetheart deal” given to Ongpin’s firm in 2009 involving the sale of government shares in Meralco.

The Commission on Audit later concluded that the sale of the Meralco shares was not done in accordance with sound business practice as the state institutions were in effect giving Global 5000 a P9-billion loan when it had an initial paid-up capital of only P62.5 million.

Landbank sale aborted

The Ombudsman’s Field Investigation Office alleged that Landbank had given “unwarranted benefits, advantage or preference to Global, a firm with doubtful financial capacity and no track record to undertake the sale.”

It said Landbank executives had entered into the stock purchase agreement with Global 5000 without any negotiations and that the deal was undertaken in 10 days.

In an interview on Friday, Ongpin explained that several government financial institutions, including Landbank and the SSS, moved as a group to sell their Meralco shares to Global 5000 in 2009 at the height of a battle for control of Meralco between San Miguel Corp. and the PLDT group.

Global 5000 was allied with the San Miguel conglomerate, but was narrowly edged out by the PLDT group for control of the distribution utility after a bruising boardroom battle.

At the time the deal was made, Meralco’s shares were trading on the local stock exchange at P57 per share, and Global 5000 offered to buy the shares at P90 apiece, representing a 57-percent premium. The SSS’s shares were transacted, but Landbank’s participation was aborted after a litigant in an unrelated case against the bank was able to secure a court injunction and placed a lien on the shares.

Price shot up

“So you see, the GFIs (government financial institutions) involved—those who were able to transact, at least—actually made a lot of money in this deal, considering that their acquisition cost for their Meralco shares was less than P20 per share,” Ongpin said.

At the height of the boardroom fight for Meralco, however, the company’s share price shot up to as high as P300 per share as a bidding war ensured for all available shares on the market.

Ongpin pointed out that no one could have foreseen this development.

“Saying that the GFIs could have made more money is looking at the issue with 20/20 hindsight,” he said. “That’s not how business is done.”

Ongpin—who successfully defended himself against an earlier attempt by the Aquino administration to convict him for an alleged behest loan from the Development Bank of the Philippines—expressed exasperation at the latest turn of events, describing himself as a “battle-scarred veteran.”

Acquisition vehicle

He also protested the characterization of Global 5000 as “an Ongpin company,” explaining that the company was an acquisition vehicle with five directors, including businessmen Iñigo Zobel and Joselito Campos Jr.

“There is nothing irregular about a major acquiring company using an acquisition vehicle. It is standard practice,” he said. “As a matter of fact, the ownership of PLDT and Metro Pacific Investments Corp. in Meralco is held by a similar acquisition company called ‘Beacon.’”

The Ombudsman also pointed to a Commission on Audit report that said Global 5000 deal was unsound as the holding firm had a paid-up capital of only P62.5 million and had been in existence for only a year.

Ongpin retorted: “How can anyone in his right mind say that Global 5000 was of ‘doubtful financial capability’ when, in fact, all the GFIs knew that it was backed by the country’s largest enterprises and most prominent business leaders?”

RELATED STORIES

Ongpin et al. probed in P9B Meralco deal

Former finance chief faces Senate over alleged Roberto Ongpin loan