Former officers of CIPI not yet off the hook

Former officers of Corporate Investments Philippines Inc. (CIPI) are not yet off the hook. The Securities and Exchange Commission is set to reopen its investigation into the cash-strapped investment house for possible violations of the securities law.

Jose P. Aquino, head of the SEC’s Markets Regulation Department, said while CIPI’s petition for suspension of debt payments case is under the jurisdiction of the regular courts, the SEC can still investigate the firm for possible violations of securities regulations.

The move, he said, was spurred by complaints lodged by various investors against CIPI, which filed for suspension of payments in 1999 after failing to service debts of over P867 million. Of this amount, P128.4 million is owed to creditor-banks.

A group of investors of CIPI had even sought the help of President Arroyo to recover their investments and ensure the criminal prosecution of responsible officers.

"We have to look into their claims and see what action we can take should we find something wrong," Aquino said.

Aquino said the SEC, for one, will investigate whether CIPI continue to engage in the operations of an investment house despite having surrendered its investment management activity license following the filing of its loan payments suspension petition with the Commission.

After losing its quasi-judicial functions in 1999, the SEC turned over to the RTC newly-filed cases involving petition for suspension of debt payment or rehabilitation and intra-corporate disputes. This included CIPI’s petition.

CIPI’s petition for rehabilitation, however, was denied by the RTC, forcing it to file for voluntary insolvency. This caught the ire of CIPI investors, saying the company can still be rehabilitated as its assets still exceeded its liabilities.

Shareholders of CIPI include the San Miguel Retirement Fund with 30 percent the Coca-Cola Retirement Fund with 30 percent, the Archdiocese of Cebu with 20 percent, Aton Atillano, former president of CIPI, 20 percent.

The San Miguel Retirement Fund had reportedly bought P71 million in "non-existent commercial papers from officers of the debt-saddled investment house.

Holders of the debt instruments are demanding payment. But CIPI has been unable to service the demands for pre-termination or termination of the investments due to lack of funds since it petitioned for debt moratorium.

CIPI blamed its financial woes to the nationwide economic slowdown of 1998 and 1999, which caused a significant decrease in the demand for financial services.

In its proposed rehabilitation plan, CIPI said it would implement a more directed effort in collecting its receivables and aggressively foreclose on loan collateral securing past due receivables and dispose available assets for conversion to cash. – Zinnia de la Peña