Doing it right

Whatever the new management team of Security Bank is doing — they’re evidently doing it right.

In July this year, Fitch Ratings, a leading global rating agency committed to providing the world’s credit markets with accurate, timely and prospective credit opinions, assigned a National Long Term rating of ‘AA-’ to Security Bank Corp., one of the leading universal banks in the country today.

This was quickly followed by the bank announcing a net income of P1.01 billion for the first semester of 2006, a sum that’s 50.7 percent more than the P670-million earnings for the same period last year – among the highest increase in percentage terms among all banks’ earnings for the first half of this year.

And as if to prove the point, Security Bank’s return on equity manifested considerable improvement hitting annualized average of 19.5 percent – a significant growth over the 12.6 percent in the same period last year.

Well guess what… they’ve done it again! Just recently the prestigious Asiamoney Magazine cited the bank as among the top three among locals in the categories Best Single Electronic Trading Platform, Best for Innovative FX Products and Structured Ideas and Best for FX Sales.

For better appreciation, Asiamoney’s Annual Corporate FX Poll is based on responses from senior treasury and finance executives of listed companies, multinationals, SMEs and unlisted companies in Asia Pacific.

If our memory serves us right, this is even the second year in a row that Security Bank was voted among the top three ranking banks in various sub-categories under Best Domestic FX Providers.

A second look

To a number of other observers, the controversy now hounding the Philippine Overseas Telecommunication Corp. (POTC), the Philippine Communications Satellite Corp. (Philcomsat), and the Philcomsat Holdings Corp. (PHC) may also be a tale of deceit, greed, and plunder.

These companies, sequestered by the Presidential Commission on Good Government in 1986, are owned by the Filipino people. The National Government also controls an undisputed 35 percent of POTC which wholly owns Philcomsat which in turn owns 81 percent of PHC.

And while much has been put out by one faction about the ongoing saga of stockholders vs. stockholders, others in the know have come out of the woodwork to give the other side of the proverbial coin, just so we can have a better appreciation of what is truly happening within the company and why.

It was explained that some six years ago, minority stockholders led by Victor V. Africa and Erlinda Ilusorio-Bildner forcibly took over the management of POTC and Philcomsat and barred the duly elected officers of these companies from assuming office. This was despite a clear mandate from the PCGG – which controls the government stakes in these companies – and board elections validated by the Securities and Exchange Commission which indicated that the government’s nominees were to assume management of all three companies.

Since then, the Africa-Bildner group supposedly has yet to make an audited accounting of the finances of POTC and Philcomsat since they took over. (We all know that financial statements that are not audited are a mere scrap of paper and they are self-serving.)

Contrary to what has been bandied around in the press, we’ve been apprised that in 1999, Philcomsat posted a net income of P100.2 million on revenues of P268.19 million. In 2000, net income grew to P121.75 million on revenues of P298.87 million.

However, in 2001 — based on the unaudited financial statements of the Africa group itself – Philcomsat posted a net loss of P71.9 million.

The PCGG has received reports that millions of pesos have been lost due to mismanagement and anomalous transactions. And the PCGG has time and again demanded an explanation and sought an independent audit of where the money is since this is owned by the Filipino people. But those in control consistently and adamantly refused to open the books.

Even more intriguing are the reportedly questionable acts of those in control.

We’re told that Africa has single-handedly and effectively transferred the legislative franchise of Philcomsat without the requisite approval, not once but twice: first to I-Freedom Communications Corp., whose directors and officers were charged with syndicated estafa before the Department of Justice (DOJ); and second to Everlink Intertrade Corp., for the project "Elifon".

Yet in fairness to Africa and Bildner, they are now being asked to account to the Filipino people the following:

• The unauthorized sale of POTC’s Cessna Citation II Executive Jet in 2002 for $1.3 million, proceeds of which reportedly never went to the company coffers;

• The unauthorized sale of Philcomsat’s Twin Star Aerospatialie helicopter in 2001 for P17 million, proceeds of which reportedly never went to the company coffers;

• Reported unauthorized sale of three condominium units owned by Philcomsat to spouses Geronimo and Joy Tan in late 2005 which are part of the Luxor Villas project in San Juan. Each unit has an area of 280 sq. m., but sale price was only P3 million for each unit;

• Recent sale of POTC’s share of stock in Manila Golf and Country Club for at least P10 million;

• Alleged questionable investments in Montemar Beach Club in Bataan totaling P500 million;

• Alleged questionable investments in Oriental Petroleum and Minerals Corp. and other speculative stocks worth around P600 million;

•Acquisition of real properties in Cavite in the amount of P235 million with alleged questionable titles, and where Philcomsat is last in line of at least five other prior buyers;

It would be quite interesting to know how these are explained. Besides, the people have the right to know why.

For comments, e-mail at [email protected]