SEC defends stand on Pacific Plans

The Securities and Exchange Commission (SEC) has defended its position with respect to Pacific Plans Inc.’s filing for rehabilitation with the court, pointing out that its findings were based on the pre-need firm’s submitted records.

"The statements we issued were based on files here in the office after double checking submissions made by the company. Everything came from them. We were just informing the public what we know based on the filings made by Pacific Plans,"commission secretary Gerard Lukban said yesterday.

Pacific Plans has alleged that the SEC was exercising a double standard in dealing with the problems of pre-need firms. Pacific Plans also described the SEC statements as irresponsible and reckless.

"What’s so irresponsible about that? Whatever we filed in court was the same thing disclosed to us by Pacific Plans. These things were disclosed to us and we were directed by the court to comment,"Lukban said.

He also decried Pacific Plans’ allegations that the SEC was giving preferential treatment to College Assurance Plans when the agency’s oversight committee proposed a swap of CAP’s traditional open-ended plans with fixed-value plans as part of measures to keep the company afloat.

He stressed that the swap was just a recommendation of the oversight committee and has yet to be approved by the commisson en banc.

Pacific Plans’ legal counsel Jeanette Tecson said the company’s move to file for rehabilitation was not meant to defeat planholders’ claims but was, in fact, to ensure the expeditious and orderly payment of claims.

Tecson said Pacific Plans is ready to answer all charges levelled against it by the SEC.

The SEC had asked the Makati Regional Trial Court to dismiss Pacific Plan’s petition for rehabilitation for lack of merit. In its opposition, the SEC said "there is no necessity for Pacific Plans to undergo corporate rehabilitation and that the said petition was merely resorted to by the company to evade its contractual liability to planholders."

The SEC cited the financial statements submitted by Pacific Plans which showed that the pre-need firm is solvent and liquid. As of end-December 2004, Pacific Plans even exceeded its trust fund liquidity reserve requirement by P3.77 billion, the SEC said.

According to the SEC, Pacific Plans had a total net worth of P657.84 million and P119.08 million as of end-December 2004 and March 31, 2005, respectively.

The SEC said it was because of Pacific Plans’ healthy financial condition that it agreed to the pre-need firm’s proposal for the spin-off of its pension, education and memorial businesses into a separate company now called Lifetime Plans Inc.

It also questioned Pacific Plans’ disbursement of P18.46 million in the last quarter of 2004 as management service fee to Lifetime. It also noted the pre-need firm’s allocation of commissions and bonuses to its agents and employees.

The SEC likewise pointed out that Pacific Plans filed the petition without allowing the regulator to institute remedies to ensure the protection of both the corporation and its planholders.

The SEC also pointed out that Pacific Plans deliberately failed to disclose any indication that it was indeed facing serious liquidity problems.

It also accused Pacific Plans of doctoring its books as it submitted a different set of figures in its audited financial statements as of May 31, 2004 to the Bureau of Internal Revenue.

Moreover, the SEC said the new fixed plan offered by Pacific Plans amounts to a novation of contract and therefore cannot be forced upon the planholders without their consent.