POSTSCRIPT / June 27, 2006 / Tuesday


Philippine STAR Columnist

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Quick, seal the Masinloc deal while GMA is away!

AGAINST LAW & LOGIC: The administration says it might not see again a big offer for the power plant in Masinloc, Zambales, if it orders a new bidding after voiding the $561.74-million winning bid and confiscating the $14.14-million bond of the winner for repeatedly failing to pay the down payment.

The Power Sector Assets and Liabilities Management Corp. (Psalm), which oversees the transaction, says that it is better to give YNN Pacific Consortium, the winning bidder, more time to produce the $227.54-million down payment than to enforce the law on failed biddings.

This unusual position of Psalm goes against the law, against logic and against the facts.

It betrays a lack of confidence in the marketability of the 600-megawatt Masinloc plant (the most valuable among the power generators being bid out), a bias for YNN and its boss Sunny Sun, and canine devotion to whoever is dictating Psalm’s moves to deliver Masinloc to the Malaysian firm Ranhill Berhad.

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RIGHT CONNECT: It is clear that YNN may have the connections but not the money to make good its $561.74-million offer for Masinloc. Its paid-up capital at the time of the bidding was a measly P625,000, which was raised to P2.5 million only this month after the anomaly was found out.

Another proof that YNN does not have the capacity to pay is that it will get the $227.54-million for the down payment not from its own pocket but from Ranhill, which is not a party to the bidding but is just buying out YNN from Sun and his associates for another $8 million.

A smart operator itself, Ranhill is holding tightly to its money, which according to its disclosure to the Malaysia Stock Exchange actually consists of funds to be borrowed from some bank.

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MERALCO DEAL: Ranhill has made clear that it would pay YNN/Sun the $8-million buyout price, the $227.54-million overdue down payment for Masinloc, and the balance of the $561.74-million bid price only if YNN would deliver on a silver platter a power supply contract with the Manila Electric Co. (Meralco).

Now if you were a government official with your hand on the Masinloc lever would you follow the law on failed biddings, and then order a new bidding at the risk of derailing the gravy train?

But why would Psalm and the big bosses be afraid that investors in a new bidding may not have enough money to bid high if it is true as we are being made to believe that Ranhill alone has $8 million and an additional $561.74 million to buy YNN and Masinloc in one blow?

Ranhill itself can now bid directly and save money since that would eliminate any middleman.

Of course the problem may be that Ranhill has spent already a tidy sum for facilitation or something like that.

Why are Psalm and the people upstairs afraid to seize the performance bond and displease YNN despite the glaring irregularities surrounding its bid to secure and sell Masinloc without generating one watt of electricity? What hold has YNN, and maybe Ranhill, have on them?

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SAVE $8-B: What is more logical and more profitable for the government is to cancel the last bidding and seize the $14.14-million performance bond of YNN (which Ranhill paid because YNN had no money in the first place).

If Ranhill is not an adventurer like YNN but is coming in as a bonafide investor, it can save at least $8 million by waiting for the cancellation of the YNN award and the opening of new bidding where it can participate armed with insider information.

Going to another round of bidding may pose some risk (in the sense that Ranhill might lose to other parties), but bidding directly instead of buying out a middleman/broker may turn out cheaper than financing the false steps of YNN.

By their body language, one can feel that Psalm and its bosses are committed to YNN and Ranhill. Guess why.

If the game plan is to force the transaction despite the clear irregularities, they might rush it in the next few days while President Gloria Arroyo and her husband are in Europe ostensibly unaware of the Masinloc stink.

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ROMULO RAPPED: What happens when a supposed independent director of a corporation turns out to be not really independent? How can this director be expected, as mandated by law, to protect the interest of minority stockholders?

These are some of the basic questions raised with the filing of a criminal complaint against businessman Roberto Romulo, who got himself elected as an independent director of the Equitable-PCIBank despite his links to the majority owners.

The information was filed with the Department of Justice by Winston Garcia, president and general manager of the Government Service Insurance System, after the Securities and Exchange Commission failed to act on the case.

Garcia said that the deceit perpetrated by Romulo and his co-respondent officers caused damage to the stockholders of EPCIB who include members of the GSIS and the Social Security System that hold substantial shares in the bank

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LINKS BARED: Charged also were Antonio Go, Anthony Conway and Peter Go Pailan, former members of the Equitable board, as well as former board secretary Nilo T. Natividad, who allegedly let in Romulo despite their knowing he was disqualified by law.

Romulo and some of the other accused officers have left the EPCIB, but Garcia said the act had been committed and that their departure did not extinguish the crime.

Garcia said that Romulo violated the Securities Regulation Code which provides that independent directors must not have or have had any ties with the corporation where they will serve as such.

Also barred from serving as independent directors are those persons who have been directors, officers or employees of the corporation’s affiliates, subsidiaries or related companies.

He said Romulo has served as board chairman of Equitable Card Network Inc., a subsidiary of EPCIB, and as a director of Equicom Systems Management Inc., a joint-venture company of the Equitable Group and Telus International.

Garcia said, “In all the issues brought before the board for decision, Mr. Romulo always sided with all the nominee directors of the Go family, especially with regard to actions that would perpetuate their hold and influence on the affairs of the bank despite the fact that they are no longer the majority stockholders.”

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METRO HAZARDS: Having publicized the death traps in thoroughfares of Metro Manila, I keep receiving complaints on road hazards, black spots (areas where an unusually big number of accidents occur), and the difficulty of driving on roads marred by badly designed U-turns.

Some accident victims even send me photographs of accidents where they or some friends or relatives had been involved.

I have to confess to them that there is nothing I can do to help them or mitigate these hazards. I myself have figured in accidents caused by the hazards scattered on thoroughfares by the Metro Manila Development Authority.

The psychology of top MMDA officials is that the more anyone points out road hazards, the more they refuse to act on them. They loathe being told, maybe because they think they know their jobs and need no unsolicited advice.

Also, since they think of themselves are chummy with some key members of media, they are smug in the thought that no amount of criticism can hurt them.

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BRIGHT SPOT: On the positive side, we have to commend the scrubbing and painting of the columns of the light rail system, the walls and roof of tunnels and overpasses, and the aggressive landscaping of islands and the planting of more greenery.

It used to be that red and a bright shade of yellow were considered the most attractive or easily spotted colors for safety purposes. (This explains the color of most fire trucks and such emergency vehicles.)

But now, considering the grime on Metro Manila streets, pure white has emerged as the most attractive color for safety purposes. Road blocks, walks, gutters, columns — almost anything on and near streets — would readily catch motorists’ attention if painted white.

Suddenly, white — not red, not yellow, not orange, not black, nor the now-famous Fernando Fink — stands out in the newly scrubbed streets of Metro Manila.

And this color is not just for safety. White enhances an aura of order and cleanliness. It helps reorient the disposition of motorists. I think.

Never mind the drawback that white easily gets soiled in this rainy season of flood and mud.

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EYESORE GONE: In Makati and parts of Pasay, we must commend whoever were/was responsible for the clearing and landscaping of the islands under overpasses that had been made into nests of snatchers, glue-sniffers and such dregs of society.

I even spotted a fountain actually spouting water under the crisscrossing overpasses on the South Superhighway where it meets EDSA near Magallanes Village.

And miracles of miracles, the squatter shanties packed stubbornly along the side of the South Superhighway in that same area where the Skyway comes down back to earth are gone. Whoever cleared the eyesores while Joey Lina was not looking should get a medal.

The trees along many streets and thoroughfares have grown green and lush, thanks to the rains. There should be more of them.

There should be a law, and a merciless enforcer, banning Meralco and other utility crews from cutting down the branches in an uncaring unprofessional manner and making the poor trees look grotesque.

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(First published in the Philippine STAR of June 27, 2006)

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