^

Business

SEC en banc okays creation of CAP management committee

- Zinnia B. Dela Peña -
The collegial body of the Securities and Exchange Commission (SEC) has approved the proposal for a management takeover of pre-need firm College Assurance Plan Philippines Inc. (CAP) after careful review of the terminal report prepared by an SEC oversight committee.

An SEC official said the commission en banc, the SEC’s decision-making body, affirmed the oversight committee’s recommendation that a full-time management committee (mancom) be formed to oversee the operations of CAP and its affiliates such as Comprehensive Annuity Plans and Pension Corp. and CAP Health.

"We have already approved the proposal to form a mancom for CAP. It’s just a matter of time before we implement it. We’re just waiting for additional documents that would address some of our concerns and the interests of the planholders and CAP," the SEC official said.

The same official said the commission en banc recognized the "urgent" need for the appointment of a mancom to prevent the further dissipation of CAP’s assets, currently valued at P8.5 billion.

Apart from supervising the operations of CAP, the mancom’s role would also include preserving the company’s assets, securing all records, and studying the viability of continuing CAP’s business.

The official said the en banc’s decision took into account CAP’s failure to beef up its trust fund and the mounting complaints that the corporate watchdog has received against the company.

"We’ve been receiving a lot of calls from angry planholders, complaining about delayed payments. And we’re very much concerned about this. They have sought our intervention to help them recover their investments. The mancom should be ready to draw up measures to cushion the impact of CAP’s problem on its planholders," the official said.

The official added the mancom is tasked with drafting a settlement plan that would allocate the remaining funds of the company not only among planholders with maturing obligations but also of those planholders availing in the future.

As of end-2003, CAP’s capital deficiency stood at P5.4 billion and may go up to P9.2 billion, the oversight committee said.

CAP, however, assured planholders it would not default in its obligations and that it remains committed to delivering services promised to investors.

"In spite of the problems caused by the unrestrained tuition increases, CAP is not giving up nor running away from the problem. We have been paying and still continue paying tuition," CAP first vice-president Bobby Café earlier said.

CAP earlier said it expects to receive around P1 billion from European-based fund manager International Global Capital Holdings AG.

CAP is also in talks with a local financial services group for the possible infusion of another P1 billion in fresh equity.

The prospective local investor, however, would only infuse money in CAP once the pre-need firm secures a dealership license with the SEC.

The SEC did not renew CAP’s dealership license last year due to the pre-need firm’s failure to increase its shrinking trust fund.

A trust fund refers to the money set aside by a pre-need company to answer for future claims of planholders. It is considered insufficient when it is less than the projected liability or the estimated total amount of payment for tuition or burial costs the pre-need company must pay in the future.

The SEC has been keeping a close watch on CAP since 2002 after it incurred a deficiency in its trust fund. To ensure that CAP can cover its future requirements to planholders, the SEC appointed a comptroller and oversight committee to closely monitor its financial condition.

In April, a group of CAP planholders lodged a complaint against the pre-need firm, saying CAP’s liquidity problem had been caused by mismanagement. Planholders sought the nullification of their policies, the return of their investments, and the appointment of a mancom.

vuukle comment

BOBBY CAF

CAP

COLLEGE ASSURANCE PLAN PHILIPPINES INC

COMPREHENSIVE ANNUITY PLANS AND PENSION CORP

IN APRIL

INTERNATIONAL GLOBAL CAPITAL HOLDINGS

MANCOM

NEED

PLANHOLDERS

SEC

  • Latest
  • Trending
Latest
Latest
abtest
Are you sure you want to log out?
X
Login

Philstar.com is one of the most vibrant, opinionated, discerning communities of readers on cyberspace. With your meaningful insights, help shape the stories that can shape the country. Sign up now!

Get Updated:

Signup for the News Round now

FORGOT PASSWORD?
SIGN IN
or sign in with