Osmeña says has proof of insider trading in Philex deals

by Judith Balea, abs-cbnNEWS.com

Posted at Nov 15 2011 02:06 PM | Updated as of Nov 16 2011 07:33 PM

MANILA, Philippines - The Senate's next hearing on the controversial financial dealings of businessman Roberto V. Ongpin and state-owned Development Bank of the Philippines (DBP) will focus on insider trading.

Sen. Serge Osmeña, chairman of the Senate committee on banks and financial institutions, said they have information that Ongpin and former DBP president Reynaldo David committed insider trading.

"We have proof that there was insider trading. We will come out with that in due time," Osmeña told [email protected] on Tuesday.

Asked whether the "proof" is enough to pin Ongpin down, the senator replied: "Absolutely... and Rey David, too."

In 2009, Ongpin used P660-million loans from DBP to buy a portion of the block of shares owned by the state bank in Philex Mining Corp. for P12.75 per share. Ongpin later sold the shares for P21 each to the First Pacific Group, led by Manuel V. Pangilinan. David piggy-backed on Ongpin's deal with First Pacific and sold DBP's remaining Philex shares.

The securities regulator and the Commission on Audit are looking into possible insider trading in the transactions since Ongpin, David and Pangilinan were all sitting on the board of Philex at the time the deals were executed.

Insider trading is trading of a corporation's shares by individuals with access to material information about the company that is not available to the general public.

However, Ongpin said the fact that they were in the Philex board "can never be a basis" for the allegation. He said there was no material information about Philex that was taken advantage of in the deals, and if there was any, such "was not obtained because of the insider relationship."

Osmeña said he is confident of the progress of the Senate inquiry into the Ongpin-DBP deals. "We do have plans, the strategy is in place, it's been working well. We're getting the evidence slowly but surely, so i'm happy about the progress."

Ongpin, together with 25 past and current officials of DBP, is facing criminal charges before the Ombudsman for allegedly violating banking laws and rules in connection to the P660-million loan transactions with DBP. The new board of the bank said the loans were "behest."

Ongpin is also being probed for an "anomalous" $180-million loan a company he allegedly owned obtained from DBP and another government bank, Land Bank of the Philippines. Osmeña earlier revealed that the company, Global Air Services (GAS), was able to get the loan even if it was not registered and without submitting required documents. GAS used the loan to partly fund its acquisition of securities in the Metro Rail Transit system.

Ongpin denied he owned GAS and that he had anything to do with the DBP loan.

Meanwhile, Osmeña said the Senate is sending a doctor to check on the medical condition of Ongpin's long-time secretary, Josephine Manalo, who has failed to appear in the hearings. Ongpin said Manalo has health problems.

Manalo was the authorized representative of GAS who signed the loan with DBP.

"I will have her arrested in the next hearing if she doesn't show up. She owns 99.9% of the stock of about 20 corporations (linked to Ongpin) where all this money is being channeled," Osmeña said. - With ANC report