COA: Insider trading, fraud possible in DBP loan mess

The Commission on Audit (COA) on Friday said there could have been fraud and insider trading in the purchase of 50 million shares using a loan from the Development Bank of the Philippines (DBP). "There are certain indications that some form of insider trading may have happened, some fraud may have happened," COA chair Grace Pulido-Tan said during Friday's Senate blue ribbon committee hearing on the behest loans granted by the DBP to Delta Venture Resources Inc. (DVRI), the company of businessman Roberto Ongpin. In 2009, the DBP granted P660 million in loans to DVRI. The loan was used to finance the acquisition of Philex Mining Corporation shares that were later on sold at a higher price. Although COA has yet to complete its audit report, Tan said the initial findings indicate that there was some fraud and insider trading in the deal because the Philex shares soared to a price twice the original after DVRI bought them. DVRI, through DBP, bought the Philex shares at P12.75 per share and but managed to sell it at P21.00 per share. At the time of the sale, Ongpin and former DBP president Reynaldo David were both board members of Philex. "As a matter of procedure when in the course of a regular audit, the matter (has been) referred to our fraud and investigation office," said Tan. She likewise said that they have asked the Securities and Exchange Commission to look into the matter. "(The) SEC is an agency better equipped and with a better mandate to look into possible insider trading," she said. However, Senators Loren Legarda, Francis Escudero, and Ferdinand Marcos Jr. asked Tan what prompted COA to investigate the loans. "It is important to see how the interest in this case was generated. Has there been any pressure, any information, any call, any interest by anyone in the DBP family that has expressed interest," said Legarda during the hearing. Tan denied that anybody asked them to conduct an audit. She explained that they initially found about the issue when one of their auditors read about it in a newspaper column. She also said that she got a report about it from their resident auditor. "Nobody directs the COA to make an audit of anything," she said. Escudero, for his part, asked whether it was "customary" for COA to act on newspaper reports. "So many COA investigations have been led by newspaper reports and columns," answered Tan. Marcos, however, pressed Tan. "What you have so far are merely field reports," he said. Ongpin served as Trade minister during the term of then President Ferdinand Marcos. However, Senator Panfilo Lacson, who filed the resolution to investigate the loans, said that they are straying from the issue. Senator Teofisto Guingona III, chair of the Senate blue ribbon committee, just asked Tan to submit a written explanation. The Senate hearing was still going on as of posting time. - VVP, GMA News