PSE board asked to explain choice of winning vendor

The broker-directors at the Philippine Stock Exchange (PSE) have asked the board to explain the choice of Millennium Information Technologies (MIT) Inc. as the winning vendor for the planned purchase of at least P35 million worth of computer system by the PSE, citing negative reports that it failed to implement a similar system in Brunei.

Five brokers in the PSE’s 15-man board (Robert Coyiuto Jr., Eddie Gobing, Federico Lim, Harry Liu and Edwin Luy) said no less than the PSE’s chief technology officer Ed Ocampo wrote a memorandum to PSE president Ernest Leung detailing the report on MIT’s contract termination with International Brunei Exchange (IBX).

Based on Ocampo’s Oct. 22 memo, the group said it appears MIT was contracted by IBX to develop a $5-million trading and clearing and settlement systems but was not able to deliver in time for the March 2001 schedule.

The memo stated: "After their review of the project, IBX realized that the system cannot be delivered as agreed upon. IBX decided to terminate the contract and any negotiations with MIT in December 2001."

"This is exactly our concern when in our Oct. 3, 2002 letter to the board we inquired about the track record of the vendor which was never answered to date," the brokers’ group said.

The broker-directors lashed back at Ocampo who, they said, should also be made to explain "why he takes this matter lightly by saying that the negative news on MIT will have no direct impact to our purchase of MIT’s clearing and settlement system."

"If he fails to give a satisfactory explanation, he should be asked to resign. If the Brunei Exchange on the advise of its consultant Nesdex, an affiliate of the Singapore Stock Exchange, was wise enough to cancel its contract with MIT and not to have any further dealings with it, why does the CTO insist that the PSE continue to deal with MIT," the group said.

However, Ocampo insisted that the issue will not affect the PSE’s computer system since the clearing and settlement system will not require major modifications from the base system a vendor will provide.