The government claimed on Thursday that businessman Roberto V. Ongpin had insider knowledge for a month before sealing the deal with First Pacific Company Ltd. to buy him out of Philex Mining Corp.
During a closed-door hearing by the Court of Appeals Thirteenth Division, the Office of the Solicitor-General (OSG) said it would attach an affidavit by First Pacific chief executive officer Manuel V. Pangilinan when it submits its comment on Ongpin’s petition in 60 days.
Pangilinan’s affidavit stated that as early as November 2009, both sides had already agreed to the buyout, according to the OSG.
This was a month before regulator Securities and Exchange Commission (SEC) said that Ongpin had engaged insider trading on the morning of Dec. 2 when he acquired 45,964,500 Philex shares, through his company Golden Media Corp., at a price of P19.25 to P19.50 per share.
The SEC said it was insider trading because the day before Ongpin’s acquisitions, First Pacific made a tentative offer to buy him out for P21 a share. First Pacific and Ongpin finally sealed their deal on the evening of Dec. 2.
During Thursday’s hearing, the OSG said that “as early as November, the deal was closed.” It told the appellate court that Philippine Stock Exchange rules required Ongpin to “inform the public and give them enough time to fully absorb the information.”
Ongpin had the means to do so, as the OSG argued that Ongpin could have used his many media appearances to inform the public of the deal.
But, his lawyer, Estelito Mendoza, protested the introduction of new affidavit, which comes two months after the SEC slapped Ongpin with a hefty P174-million fine.
Internal negotiations
While Mendoza admitted that “internal” negotiations did take place, he told the court the government “implicitly abandoned what is in the SEC decision” dated July 8.
Mendoza said that no new evidence could be admitted because the SEC’s decision was already on appeal with the CA.
“Well, that is somewhat surprising. If they’re trying to present new evidence, it shows that their evidence in the first place was lacking and did not warrant certainly imposing a fine on Mr. Ongpin of P174 million,” he said.
Mendoza also downplayed the issue of Ongpin’s “reputation” as raised by the OSG before the court. He said other cases pending against his client, and statements made by President Duterte that he was an oligarch, had no relevance to the case.
Mendoza also said the case had gone beyond the prescriptive period, as the SEC Enforcement and Investor Protection Department (EIPD) only began investigating Ongpin for insider trading in November 2014.
Tenfold increase
He noted that the SEC found the need to increase the fine tenfold from the P17.4 million recommended by the EIPD to serve as a deterrent for another gross violation.
“What I’m saying is if the violation is so gross that it needs to be shown as an example, as a deterrent, then why did it take them nearly five years to file it?” Mendoza said.
“You must file it right away, just like what President Duterte is doing—action right away. If you wait for five years, maybe there’s no case—or they’re making one up.”