"Honor, principle and ethics in business are the foundations in building a strong, vibrant and dynamic economy and society. We hope this is not totally lost on Mr. Pangilinan," Garcia said.
He said several months ago, it was Pangilinan himself who met with PSE chairman Felipe Yap to try to convince the bourse to agree to the changes in their original agreement, wherein Pangilinan was a signatory. Pangilinan sits in the 15-member PSE board as private sector representative of the listed companies.
In Feb. 1999, the PSE inked a deal with FBDC and Capital Consortium Inc. for the transfer of the trading floors and offices of the Exchange to a 4,000 sqm. prime lot at the heart of Bonifacio Global City’s business district by year 2004. Aside from the lot, the FBDC-CCI group also offered to shoulder the establishment of a P250-million building structure to house the new exchange, inclusive of the free construction design and detailed engineering plan.
But with the continued slump in the real estate sector that has affected the financial position of Metro Pacific Corp. (MPC), the lead firm in the private consortium of the FBDC joint venture, the developers are now taking back their offer.
Due to its huge losses and rising liabilities, MPC has been disposing of non-core assets over the past two years. In addition, it has put up for bidding a 19-hectare portion in the Bonifacio Global City.
However, Garcia insisted that the basic terms of the agreement should be respected and honored by FBDC-CCI since these were the reasons why in the first place "made us sit down and discuss details of the agreement."
He said apart from foregone opportunities wherein the PSE could have considered offers from other parties, the FBDC-CCI’s sudden change of heart had put the PSE in a quandary, noting that "it was too late in the day to explore other options."
"You simply do not ask to change an agreement at the last minute because it suits your interest or it is to your sole advantage to do so. Ethical business practice dictates that one party in an active, binding agreement cannot just simply seek amendments out of convenience," Garcia said.
Under the relocation agreement, FBDC had committed to start construction of the PSE headquarters and unified trading floor by this year. In addition, the new PSE facilities are to be completed and operational by Dec. 2004.
At present, the PSE is headquartered at the Tektite Towers in Ortigas, while operating a second trading floor at the Ayala Towers in Makati under a functional merger scheme.
The two properties were donated by Philippine Realty Holdings and Ayala Land Inc. under 10-year deeds of restriction that are due to expire in 2004.
Garcia said they have written FBDC-CCI twice to seek the enforcement of the agreement but the other party did not reply until PSE’s legel counsel, the Tan Acut Law Office, sent a demand letter.
However, Garcia said they are not inclined at this time to challenge FBDC-CCI in court since "a legal battle just might get them off the hook," noting that the group is backed up by a formidable conglomerate led by the First Pacific and PLDT empire.
"At worst, the legal option will allow FBDC-CCI to buy time. Perhaps enough to allow the real estate market to sail past the doldrums. By then, hopefully, as this scenario shows, a compromise can be worked out with PSE," he added.