A trail of SEC failure to protect investing public

Finally, following the Senate public hearing on the financial troubles that led to the closure of several pre-need companies, a proposed bill came out of this “inquiry in aid of legislation.” There is now a bill seeking to rename the Securities and Exchange Commission (SEC) to be called henceforth as the Securities In Exchange For Commission. That is the current favorite text joke going around.

This one is not a joke. President Arroyo has reportedly named senior deputy executive secretary Manuel “Manny” Gaite to the SEC to replace controversial SEC commissioner Jesus Martinez, who was implicated as the alleged “protector” of the Legacy group of pre-need firms that ran into financial troubles. Martinez was forced to go on leave of absence on the eve of the end of his seven-year fixed term as SEC commissioner.

Several weeks after the financial troubles of Legacy came out in the open, it was only last Friday that SEC swooped down and raided its offices in Quezon City and in Makati. With Martinez as its alleged “protector” out of the picture, it was only now that SEC seized documents and other relevant evidence they can use to pin down in court its owners and top executives led by Celso delos Angeles.

The controversies hounding the Legacy group of companies and the SEC have brought back memories of a similar case in the local finance sector some nine years ago. Sometime in October, 2000, the SEC Compliance and Enforcement Department issued a cease-and-desist order and filed complaints before the Department of Justice (DOJ) against the Westmont Investment Corporation (Wincorp) which was then run by a group led by former Finance Secretary Edgardo Espiritu during the term of deposed President Joseph Estrada.

When he joined the Estrada Cabinet, Espiritu supposedly divested from Wincorp and his other business interests. However, Estrada got wind of Espiritu’s continuing involvement at Wincorp. Estrada gave Espiritu a graceful exit from his Cabinet although he was really the first Cabinet member to be fired from office. After EDSA-2 in 2001, Espiritu became one of the witnesses in the plunder case against Estrada. President Arroyo then appointed Espiritu as Philippine Ambassador to the Court of St. James. Come to think of it, Espiritu is actually an overstaying ambassador already.

Anyways, it appears that the legal actions in the aftermath of the Wincorp debacle have not seen the end of this SEC case. A recent sad piece of news attests to the fact that the Wincorp row may continue to take its toll. The latest was investment banker Antonio Ong, former director and president of the firm. Many in the country’s business community were shocked to learn last month that 62-year old Ong passed away. The manner of Ong’s death has been even more shocking.

Police declared Ong’s death a suicide after he put a gun inside his mouth and pulled the trigger, killing him instantly. But many are still baffled by Ong’s decision to end his life abruptly. We can only share the scanty details that we gathered from some of our media colleagues and friends in the business community.

What is clear is that Ong just came from a court hearing that day in early February. That court hearing, we were told, was in connection with a nine-year old legal action filed by a certain Filipino-Chinese named Alejandro Ng Wee against Ong and several other directors and officers of Wincorp. In that legal action, Ng Wee wanted to collect some P400 million or so in money which he alleged were invested in Wincorp.

People can only speculate as to why the Ng Wee legal action may have led to Ong’s decision to end his life in such a tragic manner. Well, nobody knows. People can only speculate. But what is likewise clear is that the demise of Ong has revived interest on the identity and background of Ong’s nemesis in the protracted legal battle, Ng Wee himself.

Many have been asking us about Ng Wee’s background. But there is little that is known about the P400-million man. Filipino-Chinese business circles swear they hardly know anything about Ong’s legal nemesis. Ng Wee apparently does not have any major multi-million business enterprise under his name that would have made him a landmark name in the Filipino-Chinese business community. There are talks that Ng Wee is a close friend of ambassador Espiritu. But this is one speculation that we no longer wish to fan.

Transcripts of the legal proceedings might explain and would show that Ng Wee had initially used numbered accounts where he put in his P400 million in investments at Wincorp. These were in the nature of what local businessmen would call “secret” investments. The transcripts further show Ng Wee alleged that he used four persons as “stand ins” for his supposed investments in Wincorp. Following the closure of Wincorp in 2000 and his attempt at collecting his alleged investments, he was now claiming the monies placed under the names of those four persons. Apparently, the initial “secret” nature of Ng Wee’s alleged investments and his subsequent use of “stand ins” have complicated his bid to collect the P400 million or so from Ong and the other Wincorp directors and officers. This could also be a reason why the legal action has dragged on for close to a decade now and exhausted the spirit of the late investment banker Tony Ong.

And investment banker is a pragmatist when it comes to dealing with realities in the market. It was unlikely that Ong would take such drastic measures simply because of investments that did not prosper due to the dreary economic environment. Maybe, the reason for his drastic action is something that would remain a secret, known only to the late investment banker. It is a matter close to his heart that the business community will have to respect.

At the heart of this case is the SEC. As a government agency mandated to protect the investing public, whether small or big investors, the SEC must be seen by our people as their guard against predators out there like those who victimized Legacy plan holders and bilked them out of their hard-earned money.

It is sad enough that a person, driven to desperation, takes his or her own life. We do not wish a repeat of such tragic way out of one’s financial troubles. The SEC protection must come before, not after, so many people have fallen victims already.