Yasay's unfinished business - My Viewpoint

So, the President has announced that Securities and Exchange Commission chairman Perfecto Yasay, Jr. can stay. Malacañang has wisely avoided a no-win confrontation on the principle of security of tenure and has conceded that unless Yasay resigns, becomes totally incapacitated or is removed for cause, he can remain in his post until his term of office expires in 2004.

President Estrada is still miffed that Yasay has reneged on an alleged promise to hand in his resignation last December. The SEC chief insists that he meant December 2000, not 1999. Also, he had another condition: The amended Securities Act must be passed by Congress and signed into law. The proposed legislation is still stuck in the House of Representatives, after having been approved by the Senate.

For now, then, Jun Yasay appears safely ensconced at the SEC. However, he has at least one little piece of unfinished business he must dispose of before he eventually departs the Commission. And that is the messy issue of BW Resources and the alleged manipulation of its shares at the stock market. It is on this issue that Yasay reportedly incurred the ire of the President. The SEC chief was allegedly instructed to cease his public statements about BW and, more importantly, stop the investigation of the supposed stock manipulation. The President subsequently denied giving those instructions and said, among other things, that Yasay was only cautioned about irresponsible statements that could kill the stock market and erode all public confidence in it. Yasay says the investigations are still ongoing, but no results have as yet been publicly disclosed.

The price of publicly traded shares of BW Resources, a company associated with on-line bingo operator Dante Tan, skyrocketed from P1.90 per share in February of 1999, to about P25-30 in June, to a high of P107 in October. After a visit last October by Macau gambling czar Stanley Ho, who was granted an audience with the President and elected chairman of BW Resources after making an undisclosed investment, the shares began a sudden and precipitous fall which saw prices going down to P40 per share, then P22 per share. This past week, BW's stock was in the news again as trading in it was suspended when the price hit its floor limit of P12.75. When trading was resumed the following day, the stock fell to as low as P7.70 before recovering to P11.25 per share.

Some brokers were barely able to meet settlement obligations on their BW trades, but only after reportedly obtaining huge loans from friendly banks. There are persistent rumors of brokers defaulting but the PSE denies this. Out there in the coffee shops, people talk about a lucky few who made millions, but more about those suckered brokers and ordinary investors who got caught in the crash and lost their shirts, together with their illusions of a quick killing.

I mention this, in relation to Chairman Yasay because as early as November 12, 1999, in an extemporaneous speech he delivered at a Kilosbayan Forum, he talked about the strange saga of the BW Resources shares and said:

"It is apparent from these movements that someone was playing or manipulating the stock. Why can we say this?

"The PSE told us that there were no disclosures. The PSE asked BW why their shares were exhibiting this price movement. BW replied that they had no idea why this was happening.

"Trading continued. There was no halt in the trading.

"The PSE asked the brokers. The brokers said they had no information. However, the SEC felt uneasy about this. In fact, we were alarmed.

"The brokers who were trading at these high levels despite no disclosure from BW may perhaps be trading on inside information that was not yet available to the public. There had to be a reason why this stock was being traded so heavily that the prices kept going up. The suspicion was that there was manipulation. That would be the logical conclusion."

He also recounted in that speech that in a later conversation with the President he told him that "the reason BW share price fell was because a group had manipulated the trading of those shares." Yasay was defending himself from what he called "whisperers with no accountability" who had told the President that the fall in BW share price was because of the SEC investigations.

If there was manipulation of BW Resources shares, the book must be thrown at all those involved, including company officials, brokers, hangers-on and "presidential whisperers" who made piles of dirty money on the blood and guts of ordinary investors.

Yasay knows that the integrity and reliability of the Philippine stock market is now in serious question, which is why many local and legitimate investors are still staying away. The Securities Act of 1999 is important, yes, but the handling of the BW Resources manipulation, if that is what it was, is at least as important. Jun Yasay should not leave this unfinished business unresolved, whatever his plans.