Santos tosses ETPI corporate row to PCGG

Trade and Industry Secretary Juan B. Santos has decided not to interfere in the intra-corporate dispute in Eastern Telecommunications Philippines Inc. (ETPI) that involves the Presidential Commission on Good Government (PCGG).

In fact, Santos has decided to forward an appeal from the Australian government regarding the adverse action of a PCGG nominee in ETPI to the PCGG itself.

According to Santos, "I am referring the matter to the PCGG for immediate and appropriate action."

Santos expressed the view that the ETPI Board replacement is an intra-corporate dispute that should be handled by the PCGG "so that they can examine whether what the PCGG nominee did was right."

The Australian government had sought Santos’ intervention over a corporate board struggle in ETPI which could adversely affect Australian investment in ETPI.

Australian Ambassador to the Philippines Tony Hely, in a letter to Santos dated May 25, asked Santos to investigate the recent replacement of two nominees of the Australian company Australian Gigahertz Network International Pty. Ltd. (AGNI) in ETPI.

AGNI, through its Philippine subsidiary AGN Philippines, had invested A$40 million in ETPI in October 2000 for a 40 percent stake in the telecoms firm.

By virtue of its substantial investment, AGN is entitled to two board nominees who would be able to oversee and protect the Australian group’s interest.

However, recently, there has been interest from another investor group represented by former Marcos Trade Minister Roberto "Bobby" Ongpin to takeover the investment of AGNI.

AGNI believes that the unexpected replacement of its nominees in ETPI is being orchestrated to allow the Ongpin-led group to takeover AGNI’s shares.

The replacement of AGNI’s nominees was orchestrated with the help of a recently appointed nominee of the PCGG in collaboration with another ETPI Board member who is suspected to be partial to the Ongpin group.

The PCGG controls sequestrated ETPI shares held by a known dummy corporation of then President Marcos.

As a result of the removal of AGNI’s nominees in ETPI, several key executives of ETPI handling finance, human resources, sales and marketing have tendered their resignation.

The corporate turmoil in ETPI has also opened the door for other firms to pirate key personnel of the telecoms firm.

AGNI is thus concerned that its investment in ETPI may have been damaged.

In fact, by employing such a strategy, AGNI fears that its competitor is driving down the value of ETPI’s shares which would then allow an "unfair takeover bid."

Ambassador Hely had appealed to Santos that if AGNI’s claims are correct, "it raises concern about the security of investors’ interest in the Philippines and the impartiality of Philippine Government appointees to act in the interests of good governance."

Ambassador Hely asked Santos to ensure the impartial conduct of the PCGG appointees.