Senate President Juan Ponce Enrile INQUIRER FILE PHOTO
Businessman Manuel Pangilinan may no longer be called by the Senate to explain his purchase of a bulk of Philex Mining shares since as a buyer, he cannot be held responsible for any insider trading that occurred within the company.
鈥淗e is not at fault because he is the buyer.聽 The buyer has nothing to do with insider trading,鈥� Senate President Juan Ponce Enrile said in an ambush interview Wednesday.
Businessman Roberto 鈥淏obby鈥� Ongpin, however, must now explain how he and some associates formed certain companies for the apparent purpose of manipulating stock prices, he added.
This is on top of other questions that senators have prepared for Ongpin, who has been accused of entering into two behest loans with the Development Bank of the Philippines, using the proceeds to buy Philex shares, and selling these to Pangilinan.
Under scrutiny
Ongpin is also under scrutiny for insider trading or for allegedly securing a P21 per share price for the Philex stock he sold to Pangilinan even before he acquired the shares.
Enrile said this meant that 鈥渟i (Pangilinan) pa ang nabakalan (It is Pangilinan who got bilked) so to speak, because he brought shares at a very high value.鈥�
鈥淲hat do (the senators) want to elicit from him? We are not a criminal investigation body. We already have (Pangilinan鈥檚) affidavit. We can already prepare the report based on the statement of Mr. Pangilinan about his participation,鈥� he added.
No pressure
鈥淚 was the one who asked Mr. Pangilinan to just tell us the truth about the transaction. We did not pressure anybody. Just the bare facts (and) not (to) make any conclusion. He was just asked to tell what happened,鈥� Enrile said.
Pangilinan鈥檚 affidavit told how companies owned by Ongpin collectively sold his Two Rivers Pacific Holdings Corp. a total of 452,088,160 Philex shares 鈥渞epresenting approximately 9.2 percent of the total outstanding capital stock of Philex.鈥�
Senate banks committee chairman Sergio Osme帽a III said in previous statements that Pangilinan actually bought 550 million Philex shares from Ongpin.
Osme帽a said Pangilinan had until yesterday to file a short-swing profit lawsuit against Ongpin for earning at least P412 million when he sold part of this bulk鈥�50 million Philex shares鈥攖o Two Rivers.
This is because a Security and Exchange Commission provision requires a company insider to return any profit made from the period of purchase to the period of sale of company stock if both transactions occurred within a six-month period.
Osme帽a鈥檚 office said if the 50 million was bought from the DBP for only P12.75, this would have already meant a P412 million windfall for Ongpin.
Derivative suit
But Pangilinan is not the only stockholder who can sue Ongpin for undue profit, Enrile said.
鈥淯nder the law, the management of the company whose shares have been traded by an insider ought to file a case to recover the profits. That can be done by any other stockholder, what we call a derivative suit,鈥� Enrile said.
The Senate President agreed with Osme帽a that Ongpin must be investigated further for insider trading.
According to Enrile, Ongpin and his associates 鈥渒new that Mr. Pangilinan was buying shares. In Ongpin鈥檚 own paid advertisement, he said that he knew that Mr. Pangilinan was buying shares to attain 40-percent control of Philex.鈥�
The Senate President added that Ongpin, as a director and vice chairman of Philex, 鈥渘egotiated with Pangilinan for a price that was not yet known to the public.聽 (Ongpin) was asking for P27 per share, to lock in a price, and then Mr. Pangilinan agreed to lock in a price at P21.鈥�
Making a killing
鈥淥nce you lock in a price and the price in the market is low, you can go to the market, you can go anywhere else and buy at a lower price in order to make a killing,鈥� Enrile added.
At the same time, Enrile said the Senate must also 鈥渓ook into the operations of some of the companies that had been organized for Mr. Ongpin by certain people.鈥�
鈥淭here are so many of them. We have to know whether these companies were used or are being used to trade listed shares of stock in order to manipulate their prices,鈥� Enrile said.
鈥淏ecause some of them are thinly-capitalized as we call them in corporation law (with only) P20,000 (up to) P400,000. How can you engage in business (with that capital) unless you are selling bibingka or patupat or lumpia or sotanghon,鈥� Enrile asked.