Ongpin: I was not a front for Mike Arroyo in DBP loans

UPDATED 12:30 p.m. - At a Senate inquiry on Monday, controversial businessman Roberto Ongpin said he did not act as a "front" for former First Gentleman Mike Arroyo in a P660-million loan from the Development Bank of the Philippines (DBP). Ongpin made the statement before a Senate inquiry of the banks and blue ribbon committees because of the controversial P660-million loan granted to him by the DBP through the company Delta Ventures Resources Inc. (DVRI) in 2009. He said he was reacting to an "unjustified and unsubstantiated allegation" that he had a behestor, whom he said has been identified directly or by innuendo as Mike Arroyo. "Mike Arroyo is a friend of mine and has been before Gloria Macapagal-Arroyo was president but friendship does not mean that I was his crony nor that I fronted for him in any of my banking deals, much less deal at hand," Ongpin said. "It might come as a surprise to my distinguished detractors from DBP that I do not need a behestor in order to do a deal. Perhaps it is the distinguished gentlemen in DBP that now require a behestor when they make a loan," Ongpin added. "To allege that I have conspired with DBP on these loans and due to the behest of the former first gentleman, is simply not true. In fact, I should emphasize that I have been doing investment banking deals after I have left government in 1986," he likewise said. Earlier, the Senate committees found that the old DBP board allegedly "sidestepped" existing regulations of the Bangko Sentral ng Pilipinas just to accommodate the P660-million loan to DVRI. Ongpin has since denied that the deal was tainted with irregularities. Loans not behest On Monday, Ongpin likewise said it was unfair to label the loans as "behest." "(They cannot be labelled behest because) no powerful government official or individual intervened," he said. A behest loan usually refers to a loan made possible by an influential backer, even if the loan lacks sufficient collateral. During the previous hearings, it was revealed that the DVRI asked DBP to register the 50 million shares of Philex Mining Corporation bought using the DBP loan to Golden Media, Ongpin's other firm which eventually sold the shares at a higher price to Two Rivers, a firm affiliated with business mogul Manny Pangilinan. At the time, Ongpin and former DBP chair Reynaldo David were on the board of Philex. Earlier, the Commission on Audit (COA) had said that there might be possible fraud and insider trading in the deal. However, David denied that he had prior knowledge that the price of Philex shares would surge after the stocks were sold to another company. Ongpin told the Senate that "there is simply no basis in any shape or form" to allege that there was insider trading in the transaction. He added that Pangilinan is not a "half-wit" nor "insane" to opt to buy shares at a higher price when he could have bought them at a lower price. "Why would anyone in his right mind do such a thing," he said. Ongpin also said that the DBP leadership was trying to get to "someone else" and that he was just the "convenient target." Earlier, Sen. Sergio Osmena III also alleged that the DBP in 2008 illegally approved a $90-million (P3.8 billion) loan to one of Ongpin's firms. However, Ongpin said that he does not own Global Air services, the company that supposedly obtained the loan. "I wish to stress that I had absolutely nothing to do with obtaining these loans. I might say, however, that the government not only saved substantial amounts of money but in fact earned and continues to earn substantial amounts of interest as a result of these transactions," he said on Monday. — RSJ/VVP, GMA News