GSIS appoints new OIC amid suspension of Veloso, execs

MANILA, Philippines — The Government Service Insurance System has designated executive vice president Juliet Bautista as officer-in-charge (OIC) following the preventive suspension of several top officials — including GSIS president and general manager Jose Arnulfo Veloso — by the Office of the Ombudsman.

In a special board meeting held on Monday, the GSIS board of trustees appointed Bautista, the agency’s executive vice president for support services, to provide steady leadership and assure continued service to all members and pensioners.

“The GSIS Board underscores that safeguarding the institution’s integrity and protecting members’ funds remain its highest priorities. Investments in governance reforms and strong internal controls are ongoing to further reinforce system resilience and transparency,” GSIS said in a statement yesterday.

The Office of the Ombudsman had placed Veloso under a six-month preventive suspension in connection with the state-run fund’s P1.45-billion investment deal with Alternergy Holdings Corp. (Alternergy), a listed renewable energy firm founded by former energy secretary Vince Perez Jr.

Veloso, for his part, said the agency is fully cooperating with the ombudsman in the investigation and welcomes the chance to uphold the soundness of GSIS’s investment choices

“We welcome this opportunity to affirm the integrity of GSIS’s investment decisions and will provide further updates once the process concludes,” Veloso said.

In a seven-page order dated July 11 but was signed by Ombudsman Samuel Martires only on July 15, the ombudsman said it found “sufficient grounds” to place Veloso and six other GSIS officials under preventive suspension without pay amid its ongoing investigation “considering that there is strong evidence showing their guilt.”

Apart from Veloso, ordered preventively suspended were GSIS executive vice presidents Michael Praxedes and Jason Teng, vice presidents Aaron Samuel Chan and Mary Abigail Cruz-Francisco, officer II Jaime Leon Warren and acting officer IV Alfredo Pablo.

The ombudsman said the preventive suspension shall not exceed six months but may be lifted anytime the administrative investigation is terminated.

Furthermore, the ombudsman said the suspension order is immediately executory and “shall not be interrupted within the period prescribed” unless otherwise ordered by the ombudsman or any court of competent jurisdiction.

In a message relayed to reporters by Ombudsman’s Public Information and Media Relations Bureau, assistant ombudsman Pilarita Lapitan said the suspension order took effect on July 18.

The ombudsman’s investigation stemmed from an anonymous complaint it received last year over the alleged irregularities in the GSIS’ purchase of P1.45-billion worth of perpetual preferred shares (PPS) from Alternergy.

The shares, listed on the Philippine Stock Exchange in March 2024, are tradeable securities.

Alternergy has reiterated that the transaction with GSIS was fully transparent and properly documented.

“We are confident that all our actions adhere to the highest standards of governance. Maintaining stakeholder trust is at the core of everything we do,” Alternergy president Gerry Magbanua said yesterday.

Alternergy said it remitted the first PPS coupon worth P118 million to GSIS in December last year. Over seven years, the coupon is poised to deliver the pension fund a total return of 56 percent on its investment.

The P1.45-billion capital used for the subscription will be returned to the GSIS in full at the end of the investment period, Alternergy also said.

In its suspension order, the ombudsman said that based on the initial investigation, GSIS, on Nov. 7, 2023, entered into a subscription agreement with Alternergy wherein the state pension firm subscribed to a total of 100 million PPS of the renewable energy company at a price of P14.50 per share or a total subscription price of P1.45 billion.

The ombudsman said this was done without the required approval of the GSIS’ board of trustees and despite violation of several provisions of the GSIS’ 2022 Investment Policy Guidelines.

Veloso was among the officials who recently tendered courtesy resignations to President Marcos, following the administration’s push for greater accountability in key state-run institutions. Malacañang, however, declined the resignation.

The GSIS has assured the public that the agency remains strong and continues to extend benefits to members. — Brix Lelis