CAP to file series of criminal raps against top SEC officials, politicians

College Assurance Plan (CAP) Phils. Inc. will file a series of criminal charges against top officials of the Securities and Exchange Commission (SEC) and some politicians who allegedly colluded to destroy the pre-need firm’s reputation eventually leading to its collapse.

CAP legal counsel and former Solicitor General Frank Chavez said in a telephone interview that they are now preparing more criminal complaints which they hope to file with the Office of the Ombudsman next week.

Chavez refused to identify the individuals involved in the charges but stressed that he has sufficient evidence to pin these people down.The SEC officials, he said, may include directors and associate commissioners.

Last Thursday, CAP filed before the Ombudsman Office a criminal complaint against SEC general accountant Roberto Manabat, who was appointed chairman of CAP’s oversight board, for violation of Sec. 3 of the Anti-Graft and Corrupt Practices Act.

In its complaint, CAP alleged that Manabat’s decision to grant a P100,000 monthly compensation to CAP comptroller Mario Aguas unduly aggravated the company’s financial standing. It said the compensation was grossly excessive and unreasonable, as compared to the monthly salaries of CAP officers.

CAP said its chief finance officer (CFO) receives only P55,000 a month while other officers get a monthly compensation of P50,000/month. It reiterated that the standard monthly pay for a government appointee is P50,000.

Manabat, however, said the CAP board itself appointed the comptroller through a formal resolution specifying the amount of the salary. "The CFO asked me before the board meeting to prepare a short note to support the board resolution," he said.

"I’m surprised that the matter is being brought now two years after CAP started paying the salary in question just because we came up with major findings against the company. Let me point out that I did not benefit anything from it," Manabat said.

CAP argued that it was Manabat who decided that Aguas should receive a monthly salary of P100,000. "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 said.

"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 said.

CAP pointed out that Aguas is Manabat’s partner of Manabat in auditing firm 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.

"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.

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.