CAP files raps vs SEC official in oversight board

College Assurance Plans Phils. Inc. (CAP) filed yesterday before the Office of the Ombudsman a criminal complaint against Roberto Manabat, the Securities and Exchange Commission (SEC) general accountant and former chairman of the CAP oversight body, for violation of the Anti-Graft and Corrupt Practices Act.

At the same time, CAP warned that this would be the first in a series of criminal cases it intends to file against SEC officials who have conspired to bring down the financial stature of the pre-need firm.

CAP has tapped the services of former Solicitor General Frank Chavez of the Chavez Miranda Aseoche Law offices as legal counsel for the case.

In its complaint, CAP described Manabat’s decision to grant a P100,000 monthly compensation to CAP comptroller Mario Aguas as "grossly excessive and unreasonable."

"Mr. Manabat’s action came in the heels of the financial difficulties besetting CAP. In fact, per SEC’s instruction, CAP was ordered to reduce its operational and administrative costs. Clearly, the action undertaken by respondent Manabat contravened the cost saving measures of SEC," CAP said.

CAP said Aguas’ monthly compensation is disproportionately high compared to those of the other CAP officers.

"The chief finance officer of CAP receives only P55,000/month; other officers of CAP P50,000/month; and marketing officers P30,000. The standard pay for government appointees is P50,000," CAP pointed out.

CAP said it was Manabat who decided on Aguas’ monthly compensation. "As chairman of the first oversight board, respondent Manabat wielded considerable power over CAP to influence that grant of such compensation to Mr. Aguas," CAP noted.

"Neither can respondent Manabat justify the entitlement of Mr. Aguas to such compensation. Mr. Aguas does not observe regular working hours in CAP. There were many occasions when CAP officers had to request Mr. Aguas to report to the office to sign certain checks, papers and other documents. On the other hand, CAP officers who received much lower compensation worked for a minimum of eight hours a day," CAP noted.

CAP said Aguas is Manabat’s partner in Sycip Gorres Velayo (SGV). "This easily explains why respondent Manabat gave undue benefit and favor to Mr. Aguas to the prejudice of complainant CAP. Consequently, respondent Manabat should be prosecuted for violation of the Anti-Graft and Corrupt Practices Act."

Under Sec. 3 of the Act, officers and employees of offices or government corporations may be sued for causing undue injury to any party.

As a pioneer in the pre-need business, CAP, for almost 25 years, has been in the forefront of the country’s pre-need industry and has been catering to almost 90,000 scholars enrolled in various educational institutions. At the time, there was no specific law governing pre-need companies.

The SEC earlier filed before the Department of Justice a criminal complaint against the directors and officers of CAP for unauthorized sale of pre-need plans in violation of the Securities Regulation Code (SRC).

It also sought the issuance of a hold-departure order against the respondents to prevent them from fleeing the country and evading criminal liabilities.

In its complaint, the SEC said CAP sold pre-need educational plans despite the fact that it knew it had no more registered plans to sell in violation of Sec. 16 of the SRC. CAP had used up all its registered plans as early as June 2004.

The SEC said the members of the board along with the responsible officers are liable under Sec. 73 of the SRC which states: "If the offender is a corporation, the penalty may in the discretion of the court be imposed upon such juridical entity and upon the officer or officers of the corporation."

Any person who violates the rules of the SEC may suffer a fine of not less than P50,000 nor more than P5 million or imprisonment of not less than seven years nor more than 21 years or both in the discretion of the court.