Scrap P25B PLDT deal, gov’t urged – Malaya 12.30.2006

Nene: Bidding lacked transparency

BY JP LOPEZ

SENATE minority leader Aquilino Pimentel Jr. yesterday asked the Presidential Commission on Good Government to recall the alleged "irregular" bidding for a holding company’s indirectly owned shares in Philippine Long Distance Telephone Co. (PLDT) for P25 billion.

Pimentel made the call after only two firms, Parallax and Pan Asia Presidio Capital, both reportedly affiliates of the Salim Group of Indonesia which is the biggest shareholder in PLDT, participated in the bidding.

If the sale would be consummated, Pimentel said the sale would be unconstitutional.

The minority leader said that under the Constitution, foreign entities are allowed holdings in telecommunications facilities of not more than 40 percent.

"In our analysis, if we would add the block shares that is being sold by the PCGG to Parallax or Pan Asia to other foreign entities that have stakes at the PLDT, foreign ownership would reach 46 percent, which is above the constitutional limit of 40 percent," Pimentel said.

Pimentel earlier asked the Senate committees on finance and on ways and means to investigate deal.

The Sandiganbayan earlier ruled that the 46 percent stake of Prime Holdings Inc. in Philippine Telecommunications Investment Corp. was ill-gotten.

PTIC holds 14 percent of PLDT’s common shares or 3 percent outstanding shares.

Pimentel said bidding for the PTIC shares should be recalled because this was "not duly announced and lacked transparency."

He said the winning bid pegged the price for the PLDT shares at P2,025 each when the market price was P2,455.

"It is very surprising that the PCGG would sell the shares at a price less than the prevailing market price… considering that the PLDT is a ‘blue chip’ company," Pimentel said.

"At ang pagbenta pa, ginawa sa isang bidding na hindi maliwanag, not clearly announced, walang transparency, parang minamadali," he said.

Sen. Richard Gordon proposed that government, through the PCGG, undertake an "omnibus" instead of piecemeal sale of its shares in sequestered companies to curb "wholesale" looting.

"The DOF (Department of Finance) and the privatization management office should devise appropriate exit strategies that will allow government to get the best price for these shares," Gordon, chair of the committee on government corporations and public enterprises, said.

Gordon said the sale should include the 35 percent stake of the government in Philcomsat Holdings Corp. (PHC), which is under Senate investigation for the alleged dissipation of its assets and resources while under the care of PCGG officials and government nominees.

Parent firm Philippine Overseas Telecommunications Corp. (POTC) and another subsidiary, Philippine Communications Satellite Corp. (Philcomsat), are also under investigation by the Senate committee chaired by Gordon.

In its hearings, the Gordon panel discovered that Palace nominees and PCGG officials conspired in the "looting" by awarding themselves with generous salaries and perks, cheap housing loans, luxury cars, travels abroad and bonuses.

Gordon said the government should let go of these private companies, which have only been used for political accommodation and for "white-collar" looting.

"Changes among the personalities sitting as government representatives in these corporations due to the ebb and flow of the political tides do not allow for the long-term vision and corresponding planning needed for the proper management of these corporations," Gordon said.

Gordon said company officials and government representatives implicated in fraudulent transactions should be prosecuted. – With Dennis Gadil