IT’S looking more like a Season of False Hopes what with the plays on the funding for the Bangsamoro Basic legislation and foreigners investing in publicly listed firms in the country. It has been said, “contrary to popular opinion or the escapist trends of society, false hope is in no way better than a harsh truth. A harsh truth is painful to accept, but there’s healing at the end. False hope, on the other hand, is a very dangerous thing that offers no reward. Not immediately, nor with the passage of time. It never pays off.”
So when some public officials say things are turning up to be good for the economy and there is a need to elect someone who will continue policies and programs, a caveat is needed.
Take the case of the proposed Bangsamoro Basic Law (PBBL) based on the Framework Peace Agreement signed in the Malacañan Palace on 15 October 2012. The Framework Agreement calls for the creation of an autonomous political entity named Bangsamoro, replacing the Autonomous Region of Muslim Mindanao (ARMM) which was described by BSA3 as “a failed experiment”.
The administration earmarked P2.7B for the implementation of the Bangsamoro Basic Law (BBL) for 2015 despite the non-enactment yet of the organic act. DBM Secretary said the BBL appropriation was proposed “in anticipation of the enactment of the organic act at the end of this year or early 2015.” Secretary Abad, a lawyer and a former district representative is at it again, just like DAP. His creative budgeting packaged as reforms appears to often cross legal lines. From Php2.7B, it became Php8B via an “errata” to the 2015 budget. The deletion was made during the bicameral conference of Congress that endorsed the final approval of the P2.606Trillion National Budget last 10 December. Abad later on justified it as “principle being factored in” during deliberations on the errata.
Really?
Abad further stated “the P8 billion was deleted by the House. It’s supposed to fund the Bangsamoro government but it is not yet created so we cannot fund it. If it does not exist legally, we cannot fund it.” Why is it always an afterthought Atty. Abad? Was it again a propaganda to show to the stakeholders of the Bangsamoro of your sincerity when you knew it cannot be done?
Let’s talk about corporate governance and minority shareholders in the light of ASEAN integration and Tuwid na Daan. The so-called integration is just around the corner but much work needs to be done by the Securities and Exchange Commission (SEC) and Philippine Stock Exchange (SEC) insofar as protecting foreign investors from scheming individuals whose modus have not been prevented or mitigated by SEC and PSE respectively. In fact, the modus has continued from a bankrupt company to a publicly listed company reportedly about to belly up. The names behind the scheme of attracting foreign investors and scheming off with the monies are said to be notorious for the way they allegedly operate and worst, the domestic tuna industry is directly affected. The monies we are talking here are not peanuts. It runs in the billions of dollars.
The SEC’s mission is “to strengthen the corporate and capital market infrastructure of the Philippines, and to maintain a regulatory system, based on international best standards and practices, that promotes the interests of investors in a free, fair and competitive business environment. SEC shall be guided in this mission by the values of Integrity, Professionalism, Accountability, Independence and Initiative.” Quite good on paper but worst in practice and we are talking here of a publicly listed firm.
The Philippine Stock Exchange (QPSE) is the national stock exchange of the Philippines, one of the oldest stock exchanges in Southeast Asia, having been in continuous operation since its inception in 1927. Not a single prosecution of insider’s trading has occurred and more often underwriters hold on to some shares and become directors of corporations. Are they acting as dummies? Do they manipulate the market prices to float the price even while the company is bleeding dry?
Why can’t SEC do an honest to goodness monitoring? When company A, a family owned corporation, runs bankrupt and later sets up company B with the same family members as directors and creditors of company A become shareholders, company B needs to disclose these conflicts to SEC. Unfortunately, SEC appears to be mum about it, even when such issues have been brought to their attention.
Company B was established in 2003 and foreign investors from Thailand then Hongkong and Singapore came into the picture in 2009. For 5 years since 2009, capital calls were made because of huge losses, anomalies and bad management. Instead of dual listing in the Philippines and Singapore, company B was just listed in the Philippines because of what the Singapore- based underwriter allegedly found via a forensic audit. Truly, the layering was mind boggling and as the money went around for salaries, office rent, supplies, purchase of ships and sinking vessel, almost all of the funds of the company were mixed and diced by one family with some buddies benefiting from the stash. From 34% share of company B, the foreign investors got diluted.
The majority shareholders refused the release of documents to the minority shareholders who demanded exercise of right of inspection. The minority shareholders also went to court to stop the issuance of shares to a new shareholder as well as for the accounting of corporate funds dissipated through the years and asking a management committee to be appointed by the court. Lately, a change of management took place just this December, before the end of fiscal year 2014.
With ASEAN integration, there should be transparency. Compliance and monitoring is a must. Enforcement is vital. Without these, foreign investors will turn away from the Philippines and see other investment areas where corporate governance rules and minority shareholder’s rights protected. Mr. President, your Tuwid na Daan is being ridiculed by these so-called corporate poker players.
Yeah, yeah, we are the second hottest economy as some drumbeaters would say but if some Filipino businessmen destroy our country because of minted names and backing of financial heavies, we will be a goner fast. Shame on you these corporate predators for ruining the Philippines. Shame on regulators who choose to look the other way.
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