Estrada, Enrile accuse Villar of pressuring PSE on stock sale

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MANILA, Philippines—Sen. Manuel Villar, Nacionalista Party standard-bearer, earmarked for his presidential campaign P5 billion which he raised from an allegedly irregular transaction three years ago involving his real estate firm’s shares, Senate President Juan Ponce Enrile said Thursday.
The P5 billion came from the P26 billion that the family-controlled Vista Land & Lifescapes Inc. (the corporate successor of real estate developer C&P Homes Inc.) raised in the stock market, said Enrile, senatorial candidate of the Pwersa ng Masang Pilipino (PMP).
Enrile accused Villar of influencing the Philippine Stock Exchange (PSE) board in June 2007 into approving his request to release almost 30 percent of his shares in Vista Land from the lock-up period in violation of stock exchange rules.
“If he can do this when he is still not the President, how much more if he is already the President of this country?” Enrile said at a news conference at the campaign headquarters of former President Joseph Estrada’s PMP in Mandaluyong City.
“Is this the type of person that the country should install as the next President of the Philippines?” he added.
The lock-up requirement is a prohibition on all listings and public offerings of shares of stock of private corporations.
It prohibits major shareholders like the Villars from selling their shares within a certain period to protect small shareholders from the devaluation of the shares, according to Enrile.
“In simple terms, those who want to generate funding for their companies by selling their shares to the public are prohibited from selling or dumping their own shares within a certain period because such will affect the price or value of the listed shares, thus unjustly enriching the majority shareholders at the expense of and to the detriment of the public,” Enrile said.
Villar at PSE meeting
Enrile presented minutes of a supposedly confidential PSE meeting in 2007 and a letter of PSE chair Hans Sicat as proof of his allegations against Villar. (Sicat joined the PSE board and became its chair only last year.)
The minutes showed that Villar was present at the PSE board meeting on June 29, 2007, when the board approved the release of 29.28 percent of his shares. Enrile said it was Villar himself who requested an audience with the PSE directors.
“From the record of all these proceedings, there is no doubt in my mind that Sen. Manuel Villar himself lobbied and exerted pressure to railroad the approval of his family-owned company’s request for exemption to enable him and his family to sell their shares which were otherwise subject to lockup at a hefty premium!” Enrile said.
Veiled threat
“Now, I understand what he said when he told me that he earned P5 billion when he sold his own shares of stock and that he would use the amount for his campaign. It turned out that there was manipulation and a bending of the lock-up rule of the (PSE),” added the reelectionist senator.
Enrile said he sought an explanation last month from the PSE board about Villar’s intervention. He said he received information that Villar got the concession after Villar told the board at a meeting that he had information that stockbrokers had also violated the rules.
“That remark, I understand, assumed the character of a veiled threat to members of the PSE board, and it caused the immediate approval of the requested exemption from the lock-up provision of the PSE rules,” Enrile said.
He said a member of the PSE board confirmed the veracity of the story. “And so I formally sought clarification and information through my letter to the members of the PSE board,” he added.
Request approved in 1 hour
Enrile said the PSE approved Villar’s request on the same morning that he presented “a short background on their application to release a portion of escrowed shares.”
The PMP senatorial candidate said that PSE minutes showed that Villar’s presentation, the PSE “caucus” that still included Villar, the serious questions raised by board members, and the approval of Vista Land’s request all transpired in “just over an hour.”
“The PSE [board’s] accommodation was done with such alacrity that made me wonder if they did it out of sheer efficiency and brilliance, or out of awe at the presence of no less than the [then] President of the Senate,” Enrile said.
OFWs taken advantage
Estrada, who opened the news conference with his own statement, said Villar took advantage of the overseas Filipino workers whom he vowed to protect. Many of the buyers of Villar’s property developments are migrant workers, he said.
Estrada urged Villar to respond to this and other allegations squarely.
Undeclared income
Enrile indicated that Villar could be held accountable for his failure to declare his earnings from the proceeds of the public listing.
“[The] name of Manuel Villar or of Congresswoman Cynthia Villar does not appear in the information memorandum or in the prospectus and in documents related to the public offering of Vista Land,” Enrile said.
“But he is saying that he and his spouse earned P10 billion from the public offering,” he added.
“Is this the reason why this is not declared in his 2007 and 2008 statements of assets, liabilities and net worth?” Enrile asked.
Enrile said that if Villar could be proven to be overspending in the presidential campaign then he could be the subject of disqualification proceedings.
He noted that in a casual conversation at the Senator’s Lounge with the then Senate President Villar in 2007, the latter admitted that he raised P26 billion from the public offering of Vista Land shares.
“Is all of that yours? You have quite a sizable campaign kitty!” Enrile recalled telling Villar after he asked about Vista Land’s international road show.
P5 billion personal use
He said Villar told him that P21 billion would go to his companies while P5 billion would be for his personal use.
“That’s what I would use for my campaign,” Enrile quoted Villar as saying.
Other corporations have already followed Villar’s example, according to Enrile.
Above board
The PSE said Vista Land had complied with the listing and public offering requirements of the exchange based on its records in 2007.
The Vista Land offering was done subsequent to its listing by way of introduction, which allows a company to list its shares without conducting an initial public offering.
PSE rules encourage and, in certain cases, require the applicant company to conduct a public offering of its shares within one year following the listing by introduction.
In a statement, the PSE said its board earlier approved the public offering of Vista Land and in a subsequent meeting in 2007 announced that the lock-up rule would not apply to the sale by existing shareholders (owning less than 10 percent of the outstanding capital stock of the company at the time of the offering) of their shares as part of the public offering following a listing by introduction.
“The PSE is committed to the development of the capital markets of our country and implements its rules to protect the interest of its stakeholders and the investing public,” Sicat said.
Documentary tax
Other stockbrokers said that at the time of Vista Land’s application, the PSE was just about to start lobbying Congress for the removal the documentary stamp tax to reduce transaction cost.
Shares of Vista Land tumbled by 3 percent to close at P1.88 per share Thursday in stark contrast to the generally upbeat stock market trading.


joel sumadic

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