More Uniwide investors file raps vs developer

MANILA, Philippines - Another group of small investors of Uniwide Holdings Inc. (UHI) has sued executives of Manila Bay Development Corp. (MBDC) for their lost investments.

Led by Celso Eucogco, the second set of Uniwide stockholders filed a second amended petition before Branch 258 of the Parañaque Regional Trial Court (RTC) to seek redress from MBDC for its “badges of fraud,” which they claim to be responsible for a P2.1-billion financial hemorrhage that eventually forced what was once the country’s biggest mall to go through receivership under the Securities and Exchange Commission (SEC).

They sought the refund of P381 million in rentals, payment of P100 million in damages and the extension by 20 more years the lease contract for MBDC’s reclamation property that houses the Uniwide Coastal Mall in Parañaque City.

These investors, who were among some 15,000 who bought a combined P4 billion worth of Uniwide shares when it made its initial public offering (IPO) in 1996, alleged that MBDC had managed to rip off Uniwide for so many years in cahoots with two erstwhile officers of this mall operator — UHI chief finance officer Jimmy Cabangis and its controller treasurer, Cora Rey.

This amended petition is a follow-up to the derivative suit that small stockholders led by Brenelie Rualo had earlier filed before the Parañaque RTC, which similarly traced Uniwide’s financial difficulties to the “anomalous” lease contract it forged in 1996 with MBDC – reportedly in connivance with Cabangis and Rey – covering the 10-hectare reclamation lot between Roxas and Macapagal Boulevards and near the Cavite Expressway.

In a complementary move, Rualo’s group of “similarly situated” small investors had filed an estafa case with the Makati City prosecutor’s office against Cabangis, Rey and MBDC chairman Jacinto Ng Sr. for allegedly conspiring to defraud Uniwide of almost P2.1 billion, consisting of P1.7 billion in construction funds “squandered” on the Coastal Mall and P381 million in unnecessary mall rentals.

At the same time, Eucogco’s group has also filed a separate petition asking the Parañaque RTC to reverse the decision of the Municipal Trial Court (MTC) Branch 78 favoring MBDC, which sought to eject Uniwide from its property.

The Eucogco-led complainants said in their petition for annulment of judgment that the MTC should have dismissed right away the P808.5-million case that MBDC had lodged against UHI because it was “clearly outside the jurisdiction” of municipal courts, which are only allowed to handle cases involving amounts of P500,000 or below.

“With the anomalous contract of lease with MBDC and with the P4 billion raised from the IPO, the chief financial officer (CFO) and controller treasurer of Uniwide, Jimmy Cabangis (who had received a P5 million a year salary), and Cora Rey, respectively, squandered the money raised in a project by building the Coastal Mall at the cost of P1.7 billion without hope of any recovery of investment and paid unnecessary rentals amounting to P381 million and, therefore, the total amount that was squandered was P2.1 billion more or less,” said the Eucogco-led stockholders in their amended petition.

The first group led by Rualo filed a similar case against the MBDC executives.

Earlier this year, they had filed estafa chares before the Makati City prosecutor’s office against Ng, Cabangis and Rey.

Complainants alleged that respondents had conspired to defraud Uniwide of P2.1 billion that eventually led to the dire financial straits of what used to be the country’s biggest retail chain.

Specifically, Rualo’s group accused Ng, Cabangis and Rey of “squandering” P1.7 billion of UHI funds for the construction of its Coastal Mall and then defrauding P381 million more through the payment of unnecessary mall rentals.

Coastal Mall, which was envisioned in the 1990s to become the country’s biggest shopping mall complex, was built on a 10-hectare portion of MBDC’s 40-hectare Central Business Park II in Parañaque City at that time when Cabangis and Rey were Uniwide’s respective chief financial officer and controller.