All AsiaCapital wants to suspend operations

All AsiaCapital and Trust Corp. (AACTC), once one of the country’s leading financial service institutions has requested for a suspension of its operations amid a heavy debt problem and a worsening internal conflict.

According to a joint report by the Bangko Sentral ng Pilipinas (BSP) and the Securities and Exchange Commission (SEC), AACTC has filed for a suspension of operations although it is in the thick of revising its rehabilitation plan.

In the meantime, the SEC has not renewed the trust license of AACTC which expired last July.

Last month, the financial conglomerate filed for a debt payment moratorium along with a rehabilitation proposal before the Regional Trial Court of Makati.

The debts primarily involved a $17-million loan facility extended by the World Bank’s Investment Arm International Finance Corp. (IFC), which is also a minority shareholder in AACTC with a seven-percent stake.

AACTC has been at loggerheads with IFC, with the latter expressly manifesting its disgust over the way the company is being managed. IFC had in fact called for a complete overhaul of the company’s ownership and management.

To make matters worse, IFC is blocking the proposed rehabilitation plan of AACTC and had instead batted for the company’s liquidation, believing this would be the best way to "regain its tarnished reputation."

IFC said it would not look good if AACTC would be rehabilitated once IFC divests considering that AACTC floundered when IFC was still connected with the entity.

The WB unit also claimed that their $20-million investment in AACTC was "stolen" by the directors/officers of the company, thus, they felt cheated by AACTC management. The SEC audit team, however, has not been able to uncover sufficient evidence to substantiate this allegation by IFC.

"Despite the lack of support from IFC, however, AACTC management firmly believes that it would still be able to survive," the joint SEC-BSP report said.

AACTC‘s problems started last year when it was besieged by the heavy pre-termination of placements and investments of its clients, following the collapse of several other investment companies, notably Westmont Investments Corp., East Asia Capital Investments Corp., and Corporate Investments Philippines Inc.

Although AACTC boasts of an asset base of over P6 billion, most of these are reportedly lodged in real estate and long-term commercial papers which could not be readily converted into cash to supplement its estimated P1 billion in short-term liquidity needs.

Over the past 20 years, AACTC had been a prime mover in the country’s capital market with a wide range of financial services – corporate finance, securities dealership, loan syndication, trust and investment services, pre-need and insurance, venture capital and other strategic investments.

Aside from IFC, AACTC also has UK-based Lombard Asian Private Investment Co. as a foreign partner with a 12.8-percent stake. The Filipino investors in the company, include the Chemphil Group, Alsons, Asian Terminals, Land Bank and AFP-RSBS. – Conrado Diaz Jr.