Legacy head showered SEC official with gifts

MANILA, Philippines - Legacy Group owner Celso de los Angeles showered a commissioner of the Securities and Exchange Commission (SEC) with lavish gifts, including a house and lot in a village in Parañaque allegedly to buy his silence on the dismal state of the pre-need firms owned by the controversial businessman.

Former Legacy chief operating officer Carolina Hinola and chief finance officer Namnama Pasetes-Santos revealed the questionable relationship between De los Angeles and SEC Commissioner Jesus Enrique Martinez at a hearing of the Senate committee on trade and commerce chaired by Sen. Manuel Roxas II.

The two former Legacy executives spoke of how De los Angeles misappropriated P95 million of Legacy funds for his own personal use, including some P38 million for his mayoralty campaign in Albay in 2007.

Hinola and Pasetes-Santos also said Parañaque Rep. Eduardo Zialcita had served as consultant to Legacy, a claim the latter quickly dismissed as an “insidious attempt to besmirch my name and good reputation.”

Hinola showed the committee checks and vouchers relating to the P1.475-million payment to Martinez for a Ford Expedition sold through his son’s company to De los Angeles.

The P1.475 million was sourced from the Rural Bank of San Jose, one of the 12 closed rural banks of the Legacy Group.

Hinola said the “payoff’ was made at the Linden Suites in Ortigas Center on Nov. 9, 2007. Hinola said she personally handed the P1.475-million to Martinez on De los Angeles’ instructions.

Martinez denied having received the cash during the hearing only to admit later that it was his son’s company – Spin Management Corp. – that supposedly sold the SUV to De los Angeles.

De los Angeles himself retracted an earlier claim that he had never bought an Expedition from Martinez.

“I have many Expeditions but none came from Martinez,” he had boasted. Later, however, he admitted owning an Expedition that is still registered under Martinez’s son’s company.

Assured of SEC help

Hinola narrated that Martinez had asked her and Santos-Pasetes during lunch on Feb. 14, 2006 at a Japanese restaurant at the Shangri-La hotel in Makati if Legacy had any problem with the SEC and that he could help. Zialcita was also at the same lunch meeting.

Hinola also testified that sometime in March last year, De los Angeles used some P5 million of Legacy funds for the purchase of a house and lot for Martinez’s son, Jesus III. The property is at Quendover street, Classic Homes, Parañaque.

Hinola presented three checks worth P1 million each payable to one Michael Lirio, supposedly the original owner of the house. An additional P2 million was paid by Santos also for the Parañaque property. They also presented expenses incurred by Legacy for the transfer of the house from Lirio to Martin Nicolo de los Angeles and then to Martinez’s son. 

“I know for a fact that Mr. De los Angeles is well connected with the Securities and Exchange Commission, a regulatory agency in charge of pre-need companies, as he is a close friend of Commissioner Jesus G. Martinez of the SEC,” Hinola said in a five-page affidavit which she read before the committee.

“From my interactions with both Mr. De los Angeles and Commissioner Martinez, I can say with reasonable certainty that Comm. Martinez is a close friend of Mr. De los Angeles and he helped Legacy when the company had problems renewing its dealership license in 2008 due to some deficiencies,” Hinola said.

She said De los Angeles personally used funds from Legacy Consolidated Plans Inc. (LCPI) to pay for his personal expenses including medical and electricity bills, and birthday parties including talent fees for guest artists.

When De los Angeles was already mayor, Santos said he had P19 million transferred to his account from LCPI.

De los Angeles denied all allegations made by his former executives.

“This gentleman (De los Angeles) has been receiving money from these corporations,” Senate President Juan Ponce Enrile said. He also lashed out at SEC officials for failing to freeze De los Angeles’ assets.

“If you cannot be taken for swindling people, you can at least be taken for tax evasion,” Enrile told De los Angeles.

‘Donation’ not consultation fees

Santos also testified that she prepared vouchers and checks of P100,000 a month “for and in the name” of Rep. Zialcita as consultancy fees.  

“I have never been a consultant to them, and have never been consulted by them. I must also state that I have never been the recipient, personally, of checks or funds from the companies that make up the Legacy,” Zialcita said in reaction to the accusations. But he admitted receiving assistance from De los Angeles “by way of donations voluntarily offered and freely given and which he agreed to, on behalf of the underprivileged families.”

“The brazenness of this scam is hair-raising. I pity those who were used by these scoundrels to enrich themselves,” Roxas said.

On Zialcita’s possible involvement, Roxas said he expects Speaker Prospero Nograles to act on the issue. “It’s up to the House to act on it. What I can say is that if this happened at the Senate, the Senate will convene the Ethics Committee. That’s for sure,” Roxas said.

SEC execs told to resign

Enrile demanded the resignation of Martinez for his anomalous liaison with De los Angeles.

“I think it’s about time that we call a spade a spade. If I were Commissioner Martinez, I will tender my resignation this afternoon. Honor dictates that you must at least tender that and leave it to the chief executive of the land whether to accept or not accept your resignation,” Enrile said.

“It’s about time we have to be harsh to people in the government… I don’t think anyone will disagree here that there is a semblance of unfitness on your part to exercise your power as commissioner of the Securities and Exchange Commission,” an indignant Senate president said, adding that he would file a resolution to compel the official’s resignation.

Roxas and Sen. Rodolfo Biazon vowed to support Enrile’s planned resolution.

Other SEC officials led by SEC chairperson Fe Barin and Jose Aquino, officer in charge of non-traditional securities and instruments department, also got a dressing down from Enrile.

Contemplating

Martinez, in an ambush interview, said he would consider resigning but only after deep contemplation.

“Well, I’m considering it because if that is what the Senate feels is appropriate at this time I might consider that,” Martinez, who has been with the SEC for seven years, said. His term ends on March 12.

Martinez also distanced himself from the business transactions between his son and De los Angeles’ son on the sale of the house and lot in Parañaque. He said his son Jesus III is acquainted with De los Angeles’ son through the former’s wife. Both Martin Nicolo de los Angeles and Jesus III’s wife are commercial models, Martinez said.

Palace on Martinez

Malacañang said it would wait first for the Senate and the SEC to conclude their respective inquiries into the Legacy mess and into Martinez’s questionable dealings with De los Angeles before deciding on what to do with the SEC official.

“If any evidence is found then the Palace will look into the possibility of taking action against Commissioner Martinez,” Palace deputy spokesperson Lorelei Fajardo said.

“We are as eager as the public because we sympathize with the planholders, so we are also awaiting the results of the investigation,” she said.

Meanwhile, the Philippine Deposit Insurance Corp. said it will start distributing numbered claim forms to depositors of the 12 Legacy rural banks on March 18.

In an advisory, PDIC said the filing of the claim does not necessarily mean automatic payment, saying the “filing of claims and presentation of the general requirements are part of the validation process on the deposit accounts.” - With Delon Porcalla, Marvin Sy