During the last hearing, Secretary Gloria Tan-Climaco, the presidential adviser for strategic projects, said that Fraport’s effective interest in Piatco was 61.44 percent, and not just 30 percent.
The Constitution limits foreign firms to not more than 40 percent ownership of utility companies.
"The layering and inter-locking of corporations making up the Piatco give rise to suspicions of violation of the Anti-Dummy Law," said Sen. Joker Arroyo, chairman of the Blue Ribbon Committee.
He stressed that the hearings were meant precisely to determine if there were violations of the Build-Operate-Transfer Law and of the Anti-Dummy Law, and not to hear the quarrel among Piatco stockholders.
The other panels in the joint investigation are the committee on revision of codes and laws headed by Sen. Edgardo Angara and the committee on public works headed by Sen. Ramon Revilla.
The "layering and inter-locking" of corporations making up the Piatco consortium were revealed after Senate President Franklin Drilon asked for more details on the ownership profile of the consortium.
"I want to see if the stockholders of Piatco are mere dummies of foreigners and if the constitutional provision limiting foreign equity to 40 percent has been violated," Drilon said.
Lawyer Catherine Arnaldo told the joint hearing that Piatco shares are owned by the German firm Fraport AG, 30 percent, a Japanese corporation Nissho Iwai, 10 percent; SB Airport, a Filipino corporation, 10 percent; and the group of Cheng Yong, all Filipinos, 50 percent.
She said that the Cheng group is composed of Philippine Airport and Ground Services Terminal Holdings (PTH), PAGS Terminal, Paircargo and PTI.
When pressed for more details, she said that Fraport owns 40 percent of PAGS, 40 percent of PTH, and 40 percent of PTI.
"The family of Cheng Yong owns Paircargo," Arnaldo said.
She added that Paircargo owns 60 percent of PAGS; PAGS owns 60 percent of PTH; and PTH owns 60 percent of PTI.
Arnaldo also said that SB Airport is owned by the Security Bank Capital Investment, 60 percent, and a Singaporean firm, 40 percent.
Drilon asked that all corporations give the hearing panel copies of shareholders’ agreement among the firms making up the group of Cheng Yong, and the identities of owners of the corporations.
"These corporations contributed $75 million to the Terminal 3 project. I want to know if these individuals are financially capable, that they are legitimate investors and not dummies," Drilon explained.
In another forum, Climaco said that talks that the group of Cheng Yong was a mere dummy of Fraport came because in the information memorandum issued by Fraport when it had its initial public offering in 2001, it said that on a fully-diluted basis, Fraport owned more than 40 percent, around 60 percent of Piatco.
She said she could not make a complete determination of dummyship because she was not furnished any information on shareholders’ arrangements. She stressed that this was an internal matter among shareholders and that the government was more interested in on the terms and conditions of the concession agreement and its implementation.
Cheng did not appear before the committee, forcing Sen. Robert Barbers to move that he be subpoenaed under pain of arrest if Cheng fails to appear in the next hearing, set on Friday morning.
Cheng went to the Supreme Court so he could not be compelled to appear before the Senate panel but the High Court did not issue any temporary restraining order.
Cheng was represented by lawyer Eduardo de los Angeles, who insisted that the Piatco contract for Terminal 3 was not at all onerous.
"All those onerous provisions cited by Secretary Gloria Tan Climaco and Mr. Perfecto Yasay were actually mere restatements of provisions in the original bid documents. They were authored by the government themselves, and were not inserted by Piatco," De los Angeles said.
He said that those provisions were offered by the government so there would be high bidders, and to guarantee continuous flow of finances to the project so the firm could meet guarantees to the government.
"If the government offers incentives in bid documents and such incentives are placed in the contract, government cannot brand these incentives as onerous later on," De los Angeles said.
He urged the government to respect the contract with Piatco.
"The contract calls for Piatco to build Terminal 3 and operate it for 25 years, yet after the building is nearly complete and before we could operate it, the government now wants to take over," De los Angeles charged.
He said that the terminal is now 98 percent complete and that only about $30 million is needed before it becomes fully operational.
He also refuted the claim of Climaco in the previous hearing that the bid of the Asian Emerging Dragons Corp. was superior to that of Piatco. He said that AEDC’s bid was P135 million for 27 years, including two years before operating Terminal 3, while Piatco’s bid totaled P17.75 billion, including P300 million a year for two years before operations.
De los Angeles also raised suspicions on the involvement of Washington Sycip in the government move to take over Piatco. He noted that a letter of Peter Henkel, Fraport’s representative to the Piatco board, was copy-furnished to one Joanne de Asis.
He identified De Asis as the wife of Jolly Benitez and an associate of Washington Sycip, main partner of SGV.
"I need not tell to this committee the long professional relations between Ms. Climaco and Mr. Sycip. Is there a deal being cooked under the guise of government take over?" he asked.
He submitted to the hearing panel a photo copy of a letter of Sycip to Executive Secretary Alberto Romulo dated April 19, 2002, thanking Romulo for "graciously receiving Kurk Lauk and Joanne de Asis."
"With your encouragement, they have responded very quickly to the problems of Fraport," Sycip wrote Romulo.
Angara blamed the administration’s "shifting" stand on the Piatco deal for the "unsavory speculations."
He noted that while NEDA Director General Dante Canlas and former Transportation and Communications Secretary Pantaleon Alvarez described the Piatco contract as above board, Climaco described it as onerous and even hinted of a possible government takeover.
He asked the government to give a clear and unequivocal position on the Piatco contract. At the same time, he warned against the take over, saying this would violate the B-O-T- Law.