US bankruptcy move to haunt Mirant in RP
MIRANT BANKRUPTCY: The filing for Chapter 11 bankruptcy of the US energy multinational Mirant Corp. last July 14 after failing to reach agreement with bondholders and banks to restructure its debt has sent shivers down the spine of the local Mirant and its creditors.
Mirant Philippines Corp. said, however, that the filing for bankruptcy of its US counterparts would not in any way affect its operations. The local firm accounts for more than 2,000 megawatts of installed generating capacity.
“It’s business as usual,” said Paul Flake, the firm’s vice president for external affairs. “There will be no negative impact on Mirant Philippines.”
Flake explained that the Chapter 11 filing in the US is limited to Mirant Americas and Mirant Corp. “I would like to make it clear that Mirant Philippines is not included in or affected by the filing,” he said.
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CREDITORS’ CONCERN: “Mirant Philippines is whistling in the dark,” said Red Constantino, energy campaigner for Greenpeace Southeast Asia. “It cannot deny without looking ridiculous that the demise of its US office has serious effects on Mirant Philippines.”
Mirant’s local operations have netted for the power firm P12 billion in profits last year, making it the biggest among more than 40 independent power producers (IPPs). It has power generators in Sual, Pangasinan (the biggest in the country), and Pagbilao, Quezon.
Constantino said: “With the bankruptcy declaration, combined with the slew of cases in the Philippines it now has to face alone, Mirant’s creditors have reason to be concerned. The financial umbilical cord of Mirant Philippines has been severed.”
Mirant’s demise makes it the third IPP — and the largest in the Philippines — that would have gone bankrupt after Enron and Covanta. All three are American and have been involved in the US in some anomaly or another.
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HESITANT OPFFICIALS: Many readers expressed alarm at revelations of Bataan Rep. Enrique T. Garcia Jr. (Postscript 15July03)that as much as P50 billion is lost yearly to syndicates that steal and encash big check payments intended for the internal revenue and customs bureaus with connivance of bank officials.
Still others deplored the refusal of the finance department and the Central Bank to adopt a simple solution proposed by Garcia as early as last year.
“We keep complaining of a ballooning budget deficit and our chronic lack of funds for essential services,” Marta, a FilAm using an aol address wrote. “Yet, our officials don’t feel the need to prevent the loss of P50 billion each year. Their attitude is suspicious.”
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MODUS OPERANDI: Conniving with bank officials, syndicates use this modus operandi:
- A syndicate intercepts a big (in the millions) check payment to the BIR or the customs bureau.
- The gang strikes a deal with a bank official(s), who helps open a fictitious account using a third-party check bearing an amount exactly like that one on the stolen check.
- The bank official replaces the third party check (which is discarded) with the stolen check. The stolen check is presented for clearing. The drawee bank (where the money will be drawn or taken) clears the check and the money goes to the fictitious account in the presenting bank.
The syndicate quickly withdraws the money and doles out the shares of the co-conspirators.
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GARCIA SOLUTION: Part of the solution proposed by Garcia involves filling the three unused digits at the end of the long line of printed numbers called the Magnetic Ink Character Recording at the bottom of every check. The numbers indicate among other things the bank branch, account number and check number.
Garcia suggested that the presenting bank be required to add three digits — for instance 888 for BIR and 999 for Customs — at the tailend of the MICR to indicate the payee. Delivery of the funds to them is thus ensured.
With the added codes, the drawee bank is able to ascertain that the funds intended for the BIR or Customs are credited to them.
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READERS’ COMMENTS: Reader AF Brigoli of Cebu City said that the addition of the three-digit code be made by the person writing the check, as against Garcia’s proposal to have the presenting bank do it.
MDManio using a hotmail address suggested that taxpayers who have Internet connections be allowed to transfer funds (payments) themselves online from their accounts to those of the BIR and Customs without anybody being able to divert the payments.
Wilson (wyl) using a yahoo address said, “This is only the tip of the iceberg. (Finance Secretary) Camacho is not doing this part of his job. He is good in raising funds for the government, but what good will that be if he can’t safeguard the money?”
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KEEP EBDANE: Philippine National Police chief Hermogenes Ebdane Jr. has nothing to gain in the escape of Indonesian terrorist Fathur Rohman Al-Ghozi and two companions from police custody. Laying the blame squarely on Ebdane looks illogical and unfair.
The PNP chief cannot be blamed for every mistake of personnel down the line unless it can be shown that he could have prevented the misconduct or mistake but did nothing. In the line of command, he is several layers away from the jail warden.
Ebdane is already moving to recapture Al-Ghozi and the other terrorists who walked out of their Camp Crame cells last Monday. Swift action has been taken to punish those directly responsible for the escape.
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PNP CHIEF SET UP?: The clamor for the PNP chief’s dismissal only kindles suspicion that some quarters are using, and may have engineered even, the Al-Ghozi escape to embarrass Ebdane and lay the basis for his replacement.
From Sofia, Bulgaria, where he is on official business, Senate President Franklin M. Drilon said Ebdane should be given the chance to do his job and recapture Al-Ghozi and crack down on those responsible for the escape.
Drilon said asking for Ebdane’s resignation will not solve the problem and will not result in the recapture the three suspected terrorists.
“I believe we should give Ebdane the chance to clean up this mess himself,” the senator said.
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LASTI BERATED ON TV: We were also startled to see Director Roberto T. Lastimoso of the Land Transportation Office being berated days ago by President Arroyo on nationwide TV for alleged “irregularities.”
Many observers wondered if Lastimoso was set up for replacement. Or maybe he just happened to have been a convenient prop for projecting a no-nonsense president at work?
Among those missing from their posts when the President came unannounced were the LTO cashiers. Despite later explanations that the cashiers had to leave early to deposit their collections in the bank, the TV spectacle brought home the point that Lastimoso was a goner from that point on.
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BENGZON AT L.T.O.: Lastimoso’s replacement with one Agustin Bengzon, meanwhile, has sent tongues wagging.
At his mother transportation department and within the corridors of the DOTC and its 19 attached and sectoral agencies, Bengzon is usually referred to as the protégé of Executive Secretary Alberto Romulo, his cousin.
Clinging on to the bureaucracy at the post-retirement age of 67, Bengzon has had his public service extended twice by President Arroyo, reportedly through the intercession of Romulo.
Gossips at the transportation department are still talking of his flying to Cagayan de Oro recently to attend a public hearing that the President chaired. Bengzon reportedly called up Philippine Airlines to delay his scheduled flight until after he could finish his appearance.
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UPGRADING ROUTINE: As DOTC transportation undersecretary, maybe he is entitled to that? His critics also note his alleged habit of calling the executive director of the Civil Aeronautics Board to tell PAL to upgrade his and his wife’s economy seat to business class when they travel.
His cousin in the Palace better advise him that such flaunting of power and privilege could be grounds for graft charges.
As acting chairman of the Maritime Industry Authority, Bengzon unilaterally granted authority to the Golden Swan to convert the LCT into a gas carrier. When this decision was shown to have been a mistake, other DOTC officials, especially then Secretary Pantaleon Alvarez, had to absorb the blame.