Senate panel notes insider trading in Ongpin-DBP loans

The Senate blue ribbon committee intends to find out if there was a man behind the multimillion-peso transactions of former Trade Minister Roberto V. Ongpin involving shares of stocks in publicly listed companies and if there was insider trading in those deals. Ongpin alone could not have predicted that the shares bought under the name of his companies would have gone phenomenally higher in price terms, Sen. Sergio "Serge" Osmeña III said in an interview with reporters after Friday’s Senate hearing, with Ongpin the subject a no-show. "Bobby Ongpin is not big enough to be able to get that kind of information and all that and be able to buy those shares at that price," committee member Osmeña said. In 2009, the state-owned Development Bank of the Philippines processed P660 million in loans to Ongpin's Delta Venture Resources Inc. (DVRI) to finance the acquisition of Philex Mining Corp. shares at P12.75 apiece which DVRI later on sold at P21 per share. "There has to be a “B" behind the behest. That's what we are going to find out," he added. Osmeña, who also chairs of the Senate committee on banks, financial institutions, and currencies, said Ongpin's other companies also bought Manila Electric Co. (Meralco) and Petron Corp. shares — using loans from the DBP — and then sold those shares also at higher prices. In Ongpin's dealings in the shares of stocks of those companies, the respective share prices rose in a phenomenal way, the senator said. Asked if Ongpin's close friend and former First Gentleman Mike Arroyo could also have been involved in the DVRI deals, Osmeña said they could not tell. "You will never establish that in this hearing," he noted.
Fraud and insider trading The Commission on Audit (COA) said there is possible fraud and insider trading in those transactions the DVRI entered into involving the shares of those companies. In the case of the Philex shares, COA chair Grace Pulido-Tan cited that DVRI bought at P12.75 apiece and sold at P21. Osmeña said he is open to inviting businessman Manuel V. Pangilinan, chairman and CEO of Meralco to the Senate hearing. It was Pangilinan who bought the 50 million Philex shares from DVRI, COA and Senate records showed. "The only question I'll ask him is, 'Manny did you ever talk about buying at P21? And when did you talk (about) this and to whom did you talk (to)'," he said. Ongpin denied that there were irregularities in his transactions. "Contrary to the allegations mentioned in various news reports and contained in the complaint filed by the DBP against myself and 27 other individuals, the loans obtained by my company, Delta Venture Resources Inc. (DVRI) from DBP, as well as the same transaction with Two Rivers Pacific Holding Corporation were regular and above-board," Ongpin said in a statement that was supposed to be read before the Senate blue ribbon committee Friday. The businessman did not show up at the Senate hearing because he was away in Europe on business. Ongpin lawyer Alex Poblador promised the committee his client will attend the hearings after coming back from his trip on Oct. 25. Poblador asked Senate blue ribbon chair Sen. Teofisto Guingona III to let him read Ongpin's statement but the senator refused, saying the businessman can read it when he attends the inquiry. Behest loans? At the hearing, Aurita Villosos of the DBP internal audit division told the committee, "We have noted some deviations from DBP internal policies," raising the question whether or not Ongpin got behest loans from the state-owned bank. She cited a couple of facts that showed the loans were likely behest in nature or on the order or command of someone with authority. First, the loans were approved even though DBP incurred operating losses in 2008. Villosos also noted that DVRI even got favorable terms — a low and fixed interest rate — despite a DBP circular that prohibited those terms. DBP officials observed that the “evaluation and approval of the loans were done in haste…" and that “the accounts were not adequately documented," she added. Ongpin and former DBP president Reynaldo David were both members of the Philex board when DVRI bought the 50 million shares of stock in the mining company. David insisted that there were no irregularities in the DBP transactions with DVRI. "The financial transactions of the bank were properly evaluated, studied, recommended, and approved with the end view that in the exercise of the sound business judgment of the board transactions will always be advantageous for the DBP, free from irregularities of laws, rules, and regulations," he said at the hearing. — VS, GMA News