Roberto Ongpin, a trade minister of the Marcos dictatorship, is in the hot seat of a multipronged investigation of a P660-million loan his company obtained from state-owned Development Bank of the Philippines (DBP) in 2009.
Ongpin is accused by two senators—Senate President Juan Ponce Enrile and Sergio Osmeña III—of alleged insider trading in the purchase of DBP’s 50 million shares in Philex Mining.
The question is whether Ongpin got the loan through highly placed intermediaries in the Arroyo administration or through his own business acumen and networks after he had been disgraced and left wandering in the wilderness following the ouster of the Marcos regime in 1986.
Ongpin was one of Marcos’ four heirs apparent on an executive committee the strongman had formed from which he planned to select his successors. The heirs apparent included Finance Minister Cesar Virata, Budget Minister Emmanuel Alba and Defense Minister Enrile.
None of the senior members of the Marcos bureaucratic elite survived his fall in the 1986 Edsa People Power Revolution, except Enrile who, ironically, is pressing the Senate inquiry into possible insider trading in the loan transaction of his former Cabinet colleague.
Pincers
The rebound of Ongpin’s business interests from political adversity in the post-Marcos era is amazing. He faces the pincers of two investigations—first with joint blue ribbon committee and the committee on banks, and second, with the Commission on Audit (COA).
Audit Chair Ma. Gracia Pulido-Tan has told the Senate that some forms of insider trading or fraud surrounded the loan.
Tan said the insider trading issue ought to be looked into by the Securities and Exchange Commission (SEC) “because it is our thinking that the SEC is the government agency better equipped and with a better (understanding) to look into the matter.”
Case with Ombudsman
DBP has filed criminal and administrative cases with the Office of the Ombudsman against its past board led by its chair Patricia Santo Tomas, president Reynaldo David, other DBP officials and Ongpin over the loans.
President Aquino has designated Solicitor General Jose Anselmo Cadiz as lead counsel in the prosecution of Ongpin for offenses involving either behest loans or insider trading.
Mr. Aquino has directed Cadiz to “leave no stones unturned” in holding accountable persons involved in the loans.
The government is questioning the “extraordinary speed” of the loans’ release to Ongpin.
The Ombudsman is investigating the former DBP board for approving loans to the Ongpin-led Delta Ventures Resources Inc. (DVRI), which the company used to buy 50 million Philex shares that it eventually sold to First Pacific’s Two Rivers in 2009 for a higher price.
Sold to First Pacific
The SEC is investigating Ongpin for insider trading in which he bought the Philex shares of DBP for P12.75 each and later sold these at P21 to the Manny Pangilinan’s First Pacific in a transaction that allowed it to take control of the mining company.
According to newspaper reports, Tan has noted that if DBP directly sold the shares to Pangilinan instead to Ongpin’s DVRI, the state-owned bank could have made P400 million more.
She pointed out the “interlocking directorship between DBP and Philex” when the loans were granted. As DBP president, David was an independent director and chair of the audit committee of Philex, of which Ongpin was vice chair and Pangilinan was chair.
The loans were approved in record time, prompting Osmeña, chair of the committee on banks, to call the loans the “wang-wang loans.”
All three credit committees of DBP under the previous board approved the first loan in one week, while the second loan of P510 million was approved in one day, unprecedented in DBP records.
At the second joint hearing of the two Senate committees on Friday, Enrile and Osmeña took turns grilling David. They took him to task for approving the loans.
Ongpin, who was traveling in Europe, did not attend. Due to arrive in Manila on Oct. 25, he has expressed willingness to attend the hearings.
Powerful backer
Both Osmeña and Enrile at first pursued the line that it was a “behest” loan. They suggested that Ongpin must have had a powerful backer—believed to be Jose Miguel “Mike” Arroyo (husband of former President Gloria Macapagal-Arroyo) and said to be a good friend of Ongpin.
It was suggested that Ongpin had a powerful backer who enabled him to secure the loan which the senators alleged was approved by DBP with “undue haste.”
But Ongpin, with an air of braggadocio, said in a telephone interview with the Inquirer that he did not need the backing of Mike Arroyo to be successful in taking out big-ticket loans.
Replying to Osmeña’s claim that there was a “B”—a Big Man—behind the approval of the loans, Ongpin said: “I didn’t need an A,B,C,D,E or even an FG [First Gentleman, a reference to Mike Arroyo] backing me up for me to be successful. I have been doing investment deals for 26 years now.”
Judgment calls
Ongpin said he had been engaged in large deals since he brought in Malaysian tycoon Robert Kuok during the Cory Aquino administration to put up Edsa Shangri-La Hotel and a shopping complex in Mandaluyong City.
Ongpin bragged: “It’s not a question of bigness. It’s a question of diligent research analysis… It is not a question of luck. It’s a question of careful analysis and judgment calls. That’s how I make money.”
Apparently having had more than enough of Ongpin’s insults and patronizing remarks, the senators shifted the focus from the issue of behest loans to insider trading.
On Friday, Enrile went on the attack. He said Ongpin had “cornered the market” on Philex shares “based on his inside information.”
Enrile said: “Mr Ongpin was actually buying shares from DBP and from others to be sold to some particular person.”
Handshake closed deal
He said Pangilinan and Ongpin had closed the deal for the sale of DBP’s Philex shares to Pangilinan at a meeting in Shangri-La Makati sometime between June and December 2009.
“He shook hands with Pangilinan at the price of P21 before he was able to accumulate (DBP’s Philex shares) and never shared his information with DBP and other stockholders,” the Senate president said.
The meeting took place before Ongpin’s company obtained a second DBP loan worth P510 million. The company earlier obtained a first loan amounting to P150 million.
Ongpin later used the second loan to purchase DBP’s 50 million Philex shares at P12.75 per share. He then sold these shares, along with other Philex shares he had acquired, as a block to Pangilinan at P21 per share.
The sale enabled Pangilinan to gain control of Philex, the country’s largest gold and copper mining firm.
There were issues raised over why Enrile saw no need to summon Pangilinan to the Senate hearings on the ground that “he was only the buyer.” Is Pangilinan not a crucial part of the collusion on insider trading?
Ongpin has still many issues to face at the Senate hearings. Enrile is going to lead the charge not only to humble Ongpin and probe deeper into the transaction that has something to do with market manipulation by the big actors in Philippine big business.