Landbank, SSS Execs Face Investigation for Anomalous P9-B MERALCO Deal

Top executives from the Landbank of the Philippines (LBP) and Social Security System (SSS) are facing multiple graft charges for violation of Sections 3(e) and 3(g) of Republic Act No. 3019 (Anti-Graft and Corrupt Practices Act) in connection with the block sale of MERALCO shares of stock to Global 5000 (Global) in 2008 to 2009.

Facing investigation are SSS former Chairman Thelmo Cunanan, Vice-Chairman Romulo Neri, Marianita Mendoza, Donald Dee, Sergio Ortiz-Luis, Jr., Fe Tibayan Palileo, Victorino Balais and Sonny Matula.

In a separate complaint filed by the Field Investigation Office (FIO), also facing investigation are LBP executives Margarito Teves, Gilda Pico, Marianito Roque, Patricia Rualo-Bello, Eduardo Nolasco, Albert Balingit, Ombre Hamsirani, George Regalado, Cyril Del Callar, Roberto Vergara, and Carel Halog

Also included in the investigation are Global executives namely: Iñigo Zobel, Roberto Ongpin, Joselito Campos, Jr., Consuelo Eden Lagao and Rhodel Gandingco.

Pico, Vergara and Halog are also facing administrative charges for Grave Misconduct and Conduct Prejudicial to the Best Interest of the Service.

Investigation disclosed that sometime in January 2009, Cunanan et. al. approved the block sale of its MERALCO shares to Global for P5.669 billion (at P90/share), with a downpayment of P1.133billion.

In its Audit Observation Memorandum, the Commission on Audit noted that the “block sale was not in accordance with sound business practice as it has the effect of giving a P4.535 billion loan P4.535billion to Global 5000” which had an initial paid-up capital of only P62.5million.

The deal was approved by SSS officials despite Global’s lack of financial capacity and track record as the firm was established only one year prior to the sale.

Documents show that SSS executives waived voting rights to Global despite the lack of full payment and actual transfer of ownership.

In a related development, an ongoing investigation is being conducted against LBP executives for approving the P4.193 billion (at P90/share) block sale of its MERALCO shares of stock in favor of Global.

In its complaint, the FIO stated that the LBP executives gave unwarranted benefits, advantage or preference to Global, a firm with doubtful financial capacity and no track record to undertake the sale.

It was found that LBP executives entered into a Stock Purchase Agreement without any negotiations and was undertaken in a matter of ten days.

Source: www.ombudsman.gov.ph