SEC to pursue BW probe

Sidestepping an injunction handed down by the Court of Appeals (CA), the Securities and Exchange Commission (SEC) said yesterday it will pursue its own investigation on the alleged stock price manipulation and insider trading involving Best World Resources Corp. (BWRC).

The move will be taken even as the SEC files a motion for reconsideration of the temporary restraining order issued by the CA disallowing the use of an investigation report of the Philippine Stock Exchange (PSE) as basis for the SEC's probe into the scandal that sent the country's capital market reeling.

Acting director Ruben Ladia of the SEC's Prosecution and Enforcement Division clarified that the appellate court's injunction order merely prevented the commission from using the PSE report on the controversy as basis for the PED's investigation.

Ladia said if the CA affirmed its earlier ruling, the PED has no option but to use its own partial report on the BWRC case which was supposed to have been submitted last week to the Department of Justice (DOJ).

However, it would limit the number of respondents to be recommended for prosecution to only two brokers and two individuals, instead of the five people and seven brokers cited by the PED in its partial report, Ladia said.

But if the CA upholds the SEC's motion for reconsi-deration and clarification, the PED will submit its original report, Ladia said.

Acting on orders by newly installed SEC chief Lilia Bautista, Ladia forwarded to the Office of the Solicitor General a copy of the PED report to be used in preparing the motion for reconsideration.

"At any rate, what will happen is that we can go on with our investigation since we have not completed it yet. It is possible that we could even expand the coverage of the investigation if our fact-finding efforts showed the participation of other persons or firms," Ladia said.

He expressed optimism that the appellate court would approve their petition for reconsideration, paving the way for the submission of their partial report to the DOJ.

"I think that with two associate justices dissenting, we have an edge already," Ladia said.

As a last resort, the SEC would have to elevate the case to the Supreme Court, he added.

The PED partial report on the BWRC case recommended the filing of appropriate charges against seven broker firms and five people including BWRC executives Dante Tan and Carmelo Santiago, who are known presidential allies.

Submission of the SEC report to the DOJ was prevented by the CA's issuance of the injunction order last March 22 upon the petition of businessman Jimmy Juan, who was among those cited in the report.

The list included Robert Co and Clement T. Saw, as well as broker firms Aurora Securities, Asiasec Equities Inc., Belson Securities Inc., Mark Securities Corp., PNP Securities Inc., SEC 2000 Inc. and Vickers Ballas Securities (Phils.) Inc.

Sen. Raul Roco, claiming he was not covered by the injunction, formally endorsed the SEC report to the DOJ.

"I am not restrained to submit the report to the DOJ," Roco said.

He said since the report spoke of 'prima facie' findings for violations of the Revised Securities Act, they are duty bound to refer the matter to the DOJ.

"We look forward to your actions on this matter with all due diligence and deliberate speed to help bolster investors' confidence in the capital market," Roco stated in his letter to the DOJ.

But a DOJ source who asked not to be identified said Roco's endorsement of the BWRC case to Justice Secretary Artemio Tuquero would be irrelevant.

The source clarified that the move should have been taken by the SEC, not a legislator. "In what capacity is he (Roco) filing the case?" the source asked.

Meanwhile, President Estrada expressed elation over the slight recovery of the stock market under a new SEC chief.

"I predicted that. Once Mr. Yasay steps down, the local and foreign investors will go back. What I predicted came true," the President noted.

He reiterated he never called up Yasay to ask the former SEC chairman to clear Tan.

Trade and Industry Secretary Manuel Roxas II defended Mr. Estrada from criticisms, saying "whether we like it or not, he is the president."

Addressing yesterday's meeting of the Management Association of the Philippines (MAP), Roxas said the four years still left to the Estrada administration could be better spent working instead of complaining.

During an open forum, the businessmen pointedly asked Roxas about his perceptions of Mr. Estrada's grasp of economic policies and capability to implement a coherent economic program.

"Do you honestly think that your president can, under his policies, and do you honestly think your president would be able to implement his policies if he understood them?" asked an MAP member.

Acknowledging the prevalence of such sentiment in the business community, Roxas evaded the issue by saying Mr. Estrada was a duly elected chief executive with four more years in his term.

"The alternative is unthinkable. I cannot imagine any responsible people talking of extra-constitutional ways to replace the president.," Roxas said, apparently referring to coup rumors.

There were also talks in the House of Representatives about asking Mr. Estrada to step down amid sharp declines in his popularity rating.

"Whether you voted for this gentleman or not, he is the president. His failure is our failure," Roxas argued.

"If you think it is unproductive to work for the next four years, then we will be facing an economy with a flat growth. Our children would be inheriting a country that is four years behind," he added.

He stressed that "it is easy to be smug and say we are right and he is wrong," but added that the best way to improve the situation is to cooperate to correct the errors in the system.

He said business would go on despite the controversies in government.

"Money has only one imperative, and this is to replicate. It has no conscience...it has no morality or nationality," Roxas said.

"The only way for money to replicate is to provide it with an environment of stability and consistency. When it replicates, the whole pie will grow and there will be more for everyone," he said.

The secretary did not say, however, what the Estrada administration intends to do to ensure that economic growth would trickle down to the masses.

In another development, National Treasurer Leonor Briones said the government has scrapped its plan to list its bonds at the PSE following the plunge of the capital market under the weight of the BWRC scandal.

"We are looking at an alternative venue to enable retail investors of government bonds to trade their holdings," Briones told reporters.

Bond trading was supposed to start in July.

The stock market took a beating at the height of the scandal, with share prices dropping more than 20 percent off their end-1999 level as foreign fund managers took off amid allegations of stock manipulation and insider trading. --With reports from Des Ferriols, Marichu Villanueva, Delon Porcalla, Perseus Echeminada, AFP, AP