SSS executives charged anew

Sixteen officials of the Social Security System (SSS), including former SSS chairman Carlos Arellano, were charged anew with graft before the Ombudsman yesterday, this time in a case involving an alleged anomalous investment in DMCI Holdings Inc. in May 2000.

Amado Cabaero and Honesto General, the complainants in the case, said the SSS officials invested in the construction firm which resulted in the P350 million loss for the state pension fund.

They added the SSS officials are liable for entering into a "manifestly unlawful, inequitable, or irregular transaction," which was "manifestly and grossly disadvantageous to the SSS."

"We hereby charge for violation of the Anti-Graft and Corrupt Practices Act the officers named hereunder of the SSS responsible in causing it grave harm and injuries, including the loss and dissipation of at lest P350,572,740 for their investment in DMCI Holdings Inc.," the complaint read.

Charged were Horacio Templo, Chief Actuary and executive vice president; Leopoldo Veroy, EVP (now retired); Carlos Arellano, chairman/president (now out of service); Edgar Solilapsi, SVP for investment; Amador Monteiro, SVP for legal and collection; Rizaldy Capulong, AVP or Securities Trading; and, Mariano Tolentino, AVP for Asset Management.

The others were members of the Social Security Commission who took part in approving the deal, namely Rafael Estrada, Miguel Varela, Marianita Mendoza, Juan Tan, Cecille Seno, Raul Inocentes, Bienvenido Laguesma, and Aurora Arnaez.

On Aug. 27, Arellano and 13 others were charged with the same offense in the Ombudsman. This was in connection with the alleged overpricing in the P1.165 billion purchase of stocks of PCIBank in 1999.

The complaint said the respondents were liable for graft when they approved the investment in DMCI Holdings Inc., even if the firm has yet to complete the requirements for inclusion among the companies where the SSS can invest into.

Among the requirements that were not completed prior to the SSS investment into DMCI include "financial projections, economic analysis," and "security analysis."

By hastily investing into DMCI, the officials violated SSS’ charter which provides that they "shall manage and invest with the skill, care, prudence, and diligence necessary under the circumstance then prevailing."

That the investment was bad is shown by the fact that the "share prices (of DMCI bought by SSS) dropped by 86.21 percent over a short time," the complainants said.

"From its action of investing on DMCI shares and in holding on to them despite their low investment rating and in adverse conditions, the SSS suffered tremendous losses. For the block 220, 486 million common shares alone, SSS lost P496,093,500 in the value of its investment of P575,468,460," the complainants pointed out.

To cover for the loss, the complainants said SSS used its shares in DMCI and additional cash to buy various DMCI real properties but this only compounded the financial woes of SSS.