Ongpin tells Senate: I’m not a crony of Mike Arroyo

Roberto V. Ongpin takes his oath during the Senate Blue Ribbon Committee hearing on the DBP behest loans. LYN RILLON

Finally appearing before a Senate committee looking into the loans he obtained from Development Bank of the Philippines (DBP), businessman Roberto Ongpin on Monday said  he did not obtain behest loans from the state-owned bank based on a memorandum issued by former President Fidel Ramos in 1992.

But Senate President Juan Ponce Enrile was not convinced by Ongpin’s explanation.

“Was President Ramos’ memo a law? An executive order? A President cannot enact a rule that has the effect of a law. I suppose he issued that memo as instructions to subalterns in dealing with nonperforming loans during his administration (while the Senate) hearings are in aid of legislation to see if corrective measures are necessary,” Enrile said.

Ongpin also said that former First Gentleman Jose Miguel Arroyo was not the one who paved the way for the two loans totaling P660 million he obtained from the bank.

“Mike Arroyo is a friend of mine and has been so before (his wife) Gloria… was elected President. But friendship does not mean I was his crony nor that I fronted for him in any of my investment banking deals, much less the deal at hand,” he said.

He said it might come as a surprise to his detractors from DBP that he did not need a “behestor” to get the loans.

At previous Senate hearings, Ongpin, a former trade minister during the Marcos regime, was also accused of insider trading because he was able to acquire a block of Philex Mining Corp. shares which he immediately turned around and sold at a huge profit to another businessman, Manuel V. Pangilinan, two years ago.

Ongpin applied for two loans from DBP. The first, for P150 million, was granted in May 2009 and the second, for P510 million, six months later.

He used these to purchase 50 million shares from Philex Mining Corp., the country’s largest gold and copper mining firm.

Senators were aghast at how Ongpin paid P12.75 for each Philex share and later sold the entire block  for P21 each to Pangilinan.

Ongpin complained that when Solicitor General Jose Anselmo Cadiz made a presentation before the Senate committee investigating the loans he obtained from the DBP, “he (went) straight to the eight criteria for determination of what is a behest loan (but)…conveniently failed to read the first sentence of the memorandum order’s Section 1.”

Ongpin was referring to Section 1 of Memorandum Order No. 61 issued on Nov. 9, 1992. The order called on an ad hoc fact-finding committee on behest loans to “include in its investigation, inventory and study all nonperforming loans which shall embrace both behest and nonbehest loans.”

That he paid the two loans totaling P660 million obtained by his company Delta Ventures Resources Inc. (DVRI), in 2009 way ahead of schedule only meant they were not “nonperforming” and therefore not behest, he said.

“The bottom line is clear and undeniable: These loans could never be labeled as behest because no powerful government officials or individual intervened,” Ongpin said.

“Also, they were never in default, were fully collateralized and fully paid. More importantly, no injury was caused to the DBP. On the contrary, DBP made a pile of money (about P1.4 billion to be exact),” he added.

‘Behestor’

Enrile said Ongpin was the “behestor” himself.

“It turns out you were the one negotiating with DBP and still we have to find out whether DBP was influenced by your presence in negotiating these loans,” Enrile added.

“In that case, you are the behestor for DVRI. Therefore, this could be a behest loan. I just want to clarify that, all of you here must be very careful,” he noted.

Senator Edgardo Angara said that if Ongpin’s loans were paid on time, “it is immaterial whether the criteria listed in Memoramdum Order No. 61 were present … That issue ought to be set aside so we can move on to other issues.”

Enrile however, was unconvinced.

“If a loan was given based on influence or extraneous consideration because of the nature of the negotiating party or his stature in light of the financial condition of the borrower which is on record, DVRI, then this is a behest loan. It was given at the behest of somebody influential enough to (pressure) DBP to lend him the money. That is the practice we must address by legislation,” he said.

Senator Francis Escudero likened Ongpin’s case to the “rich-father syndrome” in which a debtor would use his father’s assets to obtain a loan.

Rey David, DBP president at the time Ongpin’s loans were granted, said DVRI presented as collateral its Philweb shares worth P1.2 billion.

“Did you check the quality of Philweb, whether it could be unloaded at that volume and sustained at that price?” Enrile asked David.

“You would eventually get it back in those terms,” David assured the Senate President.

“The price of shares that time is not according to what it is. Come on, you may be a good banker but I can crack your head,” Enrile said.

Senator Sergio Osmeña III, chairman of the Senate committee on banks, likened Ongpin’s justification to a car thief who returned the vehicle he stole once the owner complained.

“Does that mean there was no crime?” Osmeña asked in an ambush interview after the hearing of the Senate blue ribbon and banks committees.

$90-M loan to GAS

The senator noted that apart from the loan extended to DVRI, the DBP during David’s time also granted a $90-million loan to Global Air Services (GAS), which is based in the British Virgin Islands.

While Ongpin’s direct involvement with GAS cannot be established, Osmeña said DVRI president Josephine Manalo and a certain Attorney Ponferrado, who both have links to Ongpin, were signatories to the loan.

“Also, there is another corporation linked to GAS—Astoria Investment Ventures Inc.—that has four people also linked to Ongpin,” Osmeña added.

“If GAS is not licensed to do business in the Philippines, why would the DBP let it borrow $90 million. It also got another $90-million loan from Land Bank of the Philippines, so its president Gilda Pico can also be liable for plunder,” the senator said.

Ongpin twitted charges that DBP suffered from “opportunity trading loss” after DVRI purchased its Philex shares and sold these to Pangilinan at a much higher price.

Ongpin’s critics claimed DBP suffered a P400-million loss because of this transaction.

“This allegation is simply absurd. It is obviously based on hindsight,” the businessman said, repeating an explanation he made to Inquirer a month ago.

Ongpin said that when DBP officials sold him the bank’s Philex shares for P12.75 each, they “simply wanted to lock in their profits, having bought the shares at an average cost of P5.7 per share, thus being able to sell at more than 2.5 times the cost.”

Ongpin also debunked allegations of insider trading.

“The fact that the sellers, myself and (former) DBP president Rey David and the buyer, Mr. Pangilinan, were all on the board of Philex can never be a basis for the allegation…” he said. With Maila Ager, INQUIRER.net

Originally posted: 10:59 am | Monday, November 14th, 2011