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Get Real

Get on with it, PCGG and OSG

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What can the Presidential Commission on Good Government (PCGG) be thinking?  For that matter, what can the Office of the Solicitor General (OSG) be thinking? Why are they just sitting back and scratching their b–s as they wait for the merger of Allied Bank and Philippine National Bank to take place? Why aren’t they going to the Supreme Court and seeking a temporary restraining order, or instituting quo warranto proceedings? Why are they allowing the Filipino people to get screwed (again)?

And why did the Bangko Sentral ng Pilipinas (BSP) approve the merger, in the first place? Not only did the PCGG send it a letter opposing the merger, but the BSP must know, better than anyone else, just what kind of shenanigans—courtesy of the dictator Ferdinand Marcos—took place just so Lucio Tan would win the bid for what was then GenBank and is now Allied Bank. BSP records were subpoenaed in the civil case against Tan, and they provide the most damning, incontrovertible evidence that Tan was actually Marcos’ puppet, and show how the then governor of the Central Bank (CB) bent and broke the CB’s own rules and regulations to accommodate Tan (so much so that the senior CB officials, to protect themselves, wrote him a memo detailing everything that was irregular/wrong/illegal in the transaction).

I have no idea what reasoning the BSP used to approve that merger, particularly since they are aware that  Civil Case 005 against Lucio Tan et al. has not yet been finally decided, and that Allied Bank is one of the corporations involved.  But the PCGG has apparently accepted the BSP decision without a murmur. And so has the OSG. And unless they do something between now and Feb. 9, when the merger, as announced in the newspapers, will push through, we, the people, will get screwed.

Why so? The short and simple answer is that the dictator Ferdinand Marcos was the senior (and not-so-silent) partner of Lucio Tan, owning 60 percent of the Tan enterprises.  And that share belongs to the Filipino people, with the Philippine government, through the PCGG, having filed suit (Civil Case 005) against Tan for its recovery. Did I say 60 percent?  That has to be the minimum, because apparently, a case can be made that since the Tan takeover of what is now Allied Bank was fraught with anomalies (the term used was “arbitrarily and fraudulently acquired control…”), the whole shebang belongs to us.

As mentioned above, Civil Case 005 is now in the Supreme Court. If the Allied Bank-PNB merger pushes through on Feb. 9, however, Allied Bank’s corporate existence will end. And I am advised that it will be impossible, or practically impossible, for the Filipino people to recover anything from it (which reportedly is why the merger was planned, in the first place).  The Filipino people will be left holding an empty bag.  And how much was in the bag? The total stockholders’ equity (that should be ours, or at least 60 percent of it) amounted to P24 billion as of end June 2012.  Plus, of course, at least 60 percent of all the distributed profits since Tan “won” what is now Allied Bank in 1977.

And that is just one company. Consider that as of March 2012, the net worth of Lucio Tan was estimated by Forbes magazine to be $3.5 billion (said to be an underestimate)—and consider that that empire was started with the active help and intervention of Marcos, who, according to documentary evidence, held 60 percent of the parent company.

Just in case the Reader is doubting that Tan got his bank for a song, consider that he paid up front only P500,000 for GenBank, which at that time had assets estimated at P688 million, capital accounts of P104 million, and cash on hand of P26 million. And if there is any doubt that Marcos was behind Tan, consider that there is a letter from Tan asking for Marcos’ help in “persuading the PNB” to commit to issue a letter of credit that had to accompany his bid, and less than 40 hours later, the PNB made the accommodation. Or consider that Tan was given advance notice of this requirement—the other bidders were told only on the morning of the day for submission of bids, which was why Tan ended up being the only bidder, because who could possibly get such a commitment from a bank on the same day it is requested?

Does the Reader want to know more?  How about that after Tan won the bid, the Central Bank dispensed with the requirement of a standby irrevocable letter of credit (which was what scared off the other bidders, in the first place); that the CB accepted tobacco inventory as collateral, instead of the required real estate and government securities; and that the period for the payment of the emergency advances of GenBank assumed by Allied Bank was extended from two years to five years? (The Reader who wants to read more of the gory details may e-mail me at solita_monsod@yahoo.com, and I will gladly provide them.)

But let us move forward. It is now Feb. 2, and Feb. 9 is merger day. But it isn’t too late for the PCGG to ask the Supreme Court for a TRO, and for the OSG to institute quo warranto proceedings because really, all they have to do is just copy from or use as a basis the work of Catalino Generillo. And who is Generillo? He is  the fellow who struck pay dirt when, as a PCGG lawyer, he asked that the Central Bank records on the Tan takeover of GenBank be subpoenaed—and was fired for his efforts. Generillo apparently is now the lawyer for stockholders of the former GenBank. He has done his homework—and shared it with these agencies.

So get on with it, PCGG and OSG. Don’t let the Filipino people down.


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Tags: Allied Bank , Banking , BSP , business , Get Real , Mergers , opinion , OSG , PCGG , PS Bank , Solita Collas-Monsod



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