BusinessWorld Online: Anatomy of a crony takeover (Conclusion)

Posted on 09:59 PM, April 07, 2010

Calling A Spade... -- By Solita Collas-Monsod

Anatomy of a crony takeover

The documents that I have thus far shared with the reader were sent to me by Catalino Generillo, who, while he was the PCGG lawyer in charge of Civil Case 0005 against Lucio Tan, et al., also presented it to the Sandiganbayan. They consist of letters from Lucio Tan to President Marcos and from PNB President P.O. Domingo to the Central Bank, an internal memorandum to Central Bank Governor Gregorio Licaros signed by his top aides, and the minutes of the Central Bank Monetary Board meeting wherein the board essentially waived its own rules to protect the PNB and to further financially accommodate Lucio Tan.
For his efforts on behalf of the Filipino people, Generillo was unceremeniously kicked out of the PCGG at the behest of Solicitor General Agnes Devanadera upon the complaint of Lucio Tan’s counsel, Estelito Mendoza. The reader, after reading these documents, can come to only one conclusion: that Lucio Tan could never have acquired what is now Allied Bank in 1977 without the help and active intervention of the dictator Ferdinand Marcos and then Central Bank Governor Gregorio Licaros. The documents are uncontrovertible proof that Tan was given advance information, that PNB stuck out its financial neck for him (obviously on orders of Marcos), that the CB violated its own rules and regulations when it allowed him to win the bid for GenBank, that the technocrats at the CB had taken the unusual step of officially writing to their boss reminding him of all these violations.
Now comes the final question: Why was Tan so "malakas" with Marcos? The answer is revealed by the last document I present to the reader: excerpts from the sworn statement of Rolando C. Gapud, signed in Hong Kong "with the advice and assistance of" his lawyer, Angel C. Cruz, and in the presence of then PCGG Chair Jovito Salonga and Salvador C. Hizon, also of PCGG. The document speaks for itself (the few comments I have are italicized and bracketed).
"Sworn Statement
"I, Rolando C. Gapud, a Filipino citizen, of legal age, hereby depose and state under oath:
".......I was appointed VP of Bancom Development Corporation and rose to become Senior Executive Vice President and Chief Operating Officer....I provided financial consultancy services to our clients. Among such clients was Mr. Jose Yao Campos of United Laboratories.....I was introduced by Mr. Jose Yao Campos to Mr. Marcos in or around 1973-1974...I was asked by Mr. Marcos to audit companies under the supervision and ownership of the following persons: Pablo Roman...Roberto Sabido...Frankie Teodorol...Luis Yulo...Trinidad Enriquez... I recall that I submitted to PCGG a brief description of the businesses of business associates and relatives of Mr Marcos -- including the following: (ANNEX "A") [Annex A consists of 25 pages describing the businesses of 29 such associates, popularly known as "cronies"] " ...I was the one who prepared and typed ANNEX "A". I submitted it...before I left the Philippines through the back-door in or around June 1986, because of what I perceived to be some great danger to my life...
"... 7. In 1980, I bcame the President and Chief Executive Officer of the Security Bank and Trust Company (SBTC). At that time, I was the Financial Executor of Mr. and Mrs. Ferdinand Marcos. It is not quite accurate to say that I was the financial advisor of Mr. and Mrs. Marcos. Although at times I was consulted by Mr. and Mrs. Marcos and in that sense acted as financial advisor, in truth I was often carrying out the instrutions of Mr. and Mrs. Marcos. These instructions came to me, either through Mrs. Fe R. Gimenez who used to all up to convey them, or given to me directly by Mr. Ferdinand Marcos or Mrs. Imelda R. Maros, after being asked by Mrs. Gimenez to go to Malacañang.
[Here comes the reference to Lucio Tan:]
"8. With particular reference, for example to MR. LUCIO TAN, I know that Mr. Marcos and Mr. Lucio Tan had an understanding that Mr. Marcos owns 60% of Shareholdings, Inc., which owns shares of Fortune Tobacco, Asia Beer Brewery Allied Bank, and Foremost Farms. I was asked sometime in 1985 to formalize this arrangement. I went to Mr. Lucio Tan for that purpose. He tried to bargain by reducing the equity of Mr. Marcos to 50%. I told him that I was merely carrying out the instructions of Mr. Marcos and that if he wanted to bargain, he should take up the matter directly with Mr. Marcos. As a matter of fact, Mr. Lucio Tan, apart from the 60% equity of Mr. Marcos, had been regularly paying, through Security Bank, Sixty Million Pesos (P60 Million) to One Hundred Million Pesos (P100 million) a year to Mr. Marcos, in exchange for privileges and concessions Mr. Marcos had been giving him in relation to the business managed by Mr. Lucio Tan. As I said on p. 7 of Annex "A", Mr. Lucio Tan gained substantial concessions in specific taxes and stamp duties for his cigarette(Fortune Tobacco) and Beer Operations. He belongs to the group that could get presidential decrees and letters of instruction from Mr. Marcos for their joint benefit. I understand that Mr. Tan asserted that he was the victim of extortion, and that he outwitted Mr. Marcos by issuing to Mr. Marcos his 60% equity in face certificates of stock. This is not accurate. Mr. Marcos and Mr. Tan were in partnership, and they derived great material benefits from their relationship. As far as I know, Mr. Tan was not in a position to outwit and outmaneuver Mr. Marcos. I do not know that there is a crony or business associate of Mr. Marcos who could have done that. [emphasis supplied -scm]
[Can anyone, with the possible exception of the present PCGG and the Sandiganbayan, still doubt that Marcos and Tan were partners, with Tan being very much the junior partner?]
"....As far as I can remember there was only one instance of what I can describe as a legitimate earning of Mr. Marcos, namely, the retirement benefits of Mr. Marcos coming from the Government Service Insurance System (GSIS), but this was very small -- around One hundred thousand pesos)...which was given to him, through the Security Bank, when he reached the age of 65.
"...Also Security Bank used to receive wire transfers from many sources abroad, involving enormous sums of money, which were credited to the trust accounts and savings accounts of Mr. Marcos.
[Gapud also relates that Marcos acquired controlling interest of at least 51% in Security Bank, and proceeded to open several dollar and peso trust accounts (most starting with 77) and savings accounts , together with fascinating details about how boxes containing cash were regular sources of savings account deposits. It doesn’t take a rocket scientist to conclude that all the money in trust and savings accounts were ill-gotten or unexplained: Gapud himself says that the only legitimate earning of Mr. Marcos was his retirement pay from GSIS.]
"...I am prepared to elaborate, if necessary, and execute such document or documents as may be needed to explain such part or parts of this Sworn Statemnt which may require clarification."
Thus does Gapud end his eight-page sworn statement (not including two annexes). He was ready to cooperate with the Philippine government in its efforts to claim the ill-gotten wealth of Marcos, wealth stolen from the Filipino people, including his share of the Tan-managed companies.
And yet, the PCGG has never used Gapud’s testimony, nor even called him to testify. In the same way that it has refused to use Tan’s brother Mariano Tanenglian as a witness for the prosecution. And the Sandiganbyan seems to be cooperating. They are that willing to kiss P220 billion (a conservative estimate of 60% of the value of the Tan empire) goodbye. The country is being suffocated by corruption. Is there a remedy? Yes. We can elect a president who will lead the fight against corruption rather than one who will allow it to flourish. This may not be a sufficient condition for success -- but it is a necessary one. The choice is ours.

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