Conrado R. Banal III
Inquirer News Service
NOBODY could say if the officials of the central bank, the Bangko Sentral ng Pilipinas (BSP) one-day passes from basement ward attendants, but they actually tried their luck at … well, peace talks.
Heading the BSP peace panel was the new capo de tutti capi of the country's monetary and financial system, BSP Governor Armando Tetangco.
Apparently, Tetangco wanted to broker peace between the two warring groups of stockholders at Equitable PCI Bank, the country's third largest bank in assets.
Featured in the squabble were the Go family, who owned 25 percent, on the one hand, and on the other the state-run pension funds Government Service Insurance System (GSIS) and Social Security System (SSS) plus Trans Middle East of the Romualdez family and the group of mall mogul Henry Sy, which together owned about 47 percent.
In the BSP-brokered peace talks, Tetangco's panel spent roughly 30 minutes with the Go family, led by Equitable PCI chairman Antonio Go, before the Go family sued for snacks.
The GSIS-SSS-Trans Middle East-Sy group, also known as the government side, got a treat from the Tetangco panel when it faced them for hours.
Nobody could say if the ease by which the Go family hurdled the BSP brand of peace process was any indication of which side Tetangco was leaning on.
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IT SEEMS the Tetangco panel needed to work more on the government side, because the Tetangco panel gave the government an offer it could just refuse.
In effect, to bring about peace in the bank, the Tetangco panel simply wanted the government side to give way to the Go family.
After all, the Go family wanted to control the bank, with their 25-percent ownership, at the expense of the GSIS and the SSS.
Sure, by suggesting that GSIS and SSS should give way to the Go family, Tetangco and company probably only wanted to protect public interest.
The GSIS and SSS, as you know, invested only P16 billion of our retirement, disability and death benefit funds in Equitable PCI Bank about six years ago.
Our pension funds also have nothing to show for their investments in the bank up to now. In fact, the market value has been cut by about half.
For our sake, the Tetangco panel proposed three innocent-sounding steps toward peace in the bank -- i.e., status quo in the stranglehold by Go family.
And they were that the two sides (1) keep the management, (2) stop the filing of court cases, and (3) split the board seats between them.
By the way, in another stroke of brilliance to protect public interest, the Tetangco panel also told the two sides to stop talking to the media. Hmmm.
There, it's the media menace all over again. At the first sign of trouble, we always get the blame. It's as if we are the ones fooling around.
* * *
AND so, since the Tetangco panel asked the two warring groups to stop filing cases, only two days after the peace talks, no wonder, the Go family filed three cases in succession.
Nobody could say if the Tetangco panel-brokered peace was part of the strategy, but the Go family filed a case before a Makati City court, another one before the Court of Appeals, and a third one before the Supreme Court.
All of the cases involved the 10 percent of Equitable PCI supposedly in "treasury shares," which the bank bought with its own money, not the Go family's money.
Six years ago, the Go family and the GSIS-SSS went into a joint venture to buy the former Philippine Commercial International Bank (PCI Bank).
The GSIS-SSS gave P16 billion in hard cash.
The Go family contributed fond wishes.
In other words, the Go family simply used the money of the bank in the joint-venture buyout. And all these years, the Go family has been using the "treasury shares" to help them keep control of the bank, even with only a 25-percent ownership.
In all those three cases, which the Tetangco panel supposedly did not want the warring groups to file, the Go family sought to keep their command over the "treasury shares."
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EARLIER, a Makati City court issued an injunction involving those "treasury shares," in effecting negating a temporary restraining order issued by another Makati court on the same shares.
Down here in my barangay, where GSIS and SSS members struggle to make ends meet, that is also known as "forum shopping," meaning, it is bad.
Supposedly, a retired justice filed a case, asking the Makati court to force the corporate secretary of the bank, a young lawyer named Nilo Divina, to recognize those "treasury shares" at the last annual meeting of stockholders.
In other words, the Go family could use the "treasury shares" -- once again.
Another Makati court had issued a temporary restraining order on the same "treasury shares," saying that they could not be used at the annual meeting.
First of all, one court cannot issue an order against another court. That is the rule. Otherwise, the courts can do nothing but fight one another, much like our politicians.
Of course, there could always be millions of reasons a court would break the rule. In this case, unfortunately, the interests of SSS and GSIS members were not one of them.
* * *
IN effect, even if the case was supposedly filed against the bank, the restraining order actually favored the Go family at the stockholders' meeting.
And Divina, as corporate secretary, followed it willingly without much of a whimper.
At the stockholders' meeting, by the way, Divina took it upon himself to preside, taking the role of the chairman, who was none other than Antonio Go.
Divina, without much ado, threatened to throw out those who did not follow the script that the Go family had prepared for the meeting.
He just declared them out of order, including GSIS president and general manager Winston Garcia, who questioned the use of those "treasury shares" at the meeting.
In effect, the court injunction order told Divina to do something that was against the by-laws of the bank. Divina did not even protest against it.
Under the bank by-laws, you see, treasury shares cannot be used to determine the existence of quorum in the stockholders meeting.
The government side has been arguing, if that was the case, it followed that those shares could not be used to vote for board members.
For how can you use something that's not supposed to be there in the first place?
The government side complained that not only did the Go family, courtesy of the corporate secretary Divina, use the treasury shares to determine quorum, they also used the shares to vote for their nominees to the board of directors.
They of course voted for themselves. Oh, of course, and also their attack dogs!
* * *
SINCE the Go family disregarded the Tetangco panel no-court-case peace initiative, the government side thus also went straight to the Supreme Court.
Otherwise, the government side would have lost their battle for reforms in the bank by default. In college girl-speak, they were "making tulog in the pansitan."
And so it seems to me that the BSP-brokered peace served as a ruse. It could have stopped the government side from taking the initiative.
How else could you look at it? Look, one of the other proposals by the Tetangco panel was for the two warring groups to split the board between them.
That means, the Go side (with 25-percent ownership) would get seven seats, and the government side (with 47-percent ownership) would also get … well, seven.
Aside from its using bad mathematics, as in "25 equals 47," the proposal of the Tetangco peace panel reeked of a sellout -- with GSIS and SSS members as the merchandise.
Under the Tetangco panel's bright idea, the swing vote in the board, the one remaining seat, would go to management.
Thus, Equitable PCI president Rene Buenaventura, who would take the management seat, should become the most powerful man in the bank.
The Tetangco panel did not mind that Buenaventura was the same guy who, in past tussles between the two groups, forgot to stay neutral by siding with the Go family.
Which only makes you wonder where the Tetangco panel learned its math. No, don't tell me, not from the ward attendants! With INQ7.net
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