Sen. Osmeña tightens noose on ex-DBP chairman

Sergio Osmeña III. INQUIRER file photo

Senator Sergio Osmeña III on Tuesday tightened the noose around a former Development Bank of the Philippines (DBP) president, accusing him of manipulating share prices in preparation for a deal for the purchase of Philex Mining Corp. shares by businessman Manuel V. Pangilinan in 2009.

Reynaldo David found himself again in the hot seat, this time after Osmeña presented pieces of evidence purportedly indicating that the ex-DBP official sought to “protect the prices” of Philex shares.

Osmeña, chairman of the committee on banks, got the details from copies of transcripts of five DBP board meetings in 2009.

“You know, Mr. David, it was obvious that you were manipulating prices… you just hanged yourself with this transcript,” the senator said during his committee’s three-hour hearing on alleged behest loans granted by the DBP to businessman Roberto “Bobby” Ongpin.

David denied the allegation.

Osmeña read portions of a Dec. 9, 2009 transcript where David was quoted as telling the board about strategies he was taking following a deal with Ongpin. The DBP had earlier sold its 50 million Philex shares to Ongpin’s group at P12.75 per share. Ongpin used a P510-million DBP loan to make the purchase. Ongpin then sold these shares, along with other shares, as a block to Pangilinan.

Saying the “shares started to go up to P15 (per share)” after the deal, David told the board: “It went up to P14, P15, P18 and a week before the final run, Ongpin told me that negotiations must start with Pangilinan and we have to protect the prices.”

Asked by Osmeña how he had sought to “protect the prices,” David replied: “It was protecting the position… just look at the market, see what’s happening and probably if it’s trickling within trading rates, one could take an additional position.”

Osmeña then interrogated David on that part of the transcript where he told DBP directors about the Pangilinan’s group’s move to “sell down” its shares—through its broker Asia Securities—“from P19 to P18 to P17 to P16.”

“So we went in and buoyed at P17, P18 and pushed back to about P18.50,” David was quoted as saying in the board meeting.

“They were bragging that they were pushing up the price P14, P15, P16, P17, P18, P19, that Manny Pangilinan was pushing down the price, P18, P17, P16, P15. That’s very obviously price manipulation,” Osmeña told reporters after the hearing.

“Price manipulation is developing a selling price that will induce people to buy or induce people to sell.”