E·N·Q·U·I·R·Y
DEMAREE J.B. RAVAL
DEMAREE J.B. RAVAL
Philcomsat, again
Sunday, 10 24, 2004
Philippine Communications Satellite, Corp. (Philcomsat) is a company established and operating in the national interest. Under a franchise granted by Congress, it provides wholesale international satellite telecommunication services, and continues to own several valuable telecommunications licenses. More importantly, the Republic of the Philippines is Philcomsat’s single largest shareholder, representing 34.9 percent of its equity. Until 1997, the Republic had received almost P800 million in cash dividends. Government directors-nominees receive lucrative fees, allowances and perks. The bright side of today’s column stops here, as we shift to another topic affecting the future of Philcomsat.
In the controversy over the reported plunder of the assets of Philcomsat, former Ambassador Manuel Nieto, Jr., who is pushing 90, is pitted against lawyer Victor Africa. Charges and countercharges of defalcation of company assets have been flying thick and fast. So far Africa has conducted a high-level campaign to save the company, taking up the fight himself in behalf of the private owners of Philcomsat. On the other hand, Nieto has not said a word. In his stead are news releases endlessly churning out mere inanities and what amount to hearsay, and therefore not the kind of claim or defense that is credible and admissible.
Nieto’s personal honor is at stake. I presume he loves Philcomsat - the company he co-founded in 1965 with the late Potenciano Ilusorio - to keep it a serious and competitive concern, as he is known to report to his Telecoms Plaza office every morning. So Nieto should speak up. The truth can only come from him. If he needs to denounce those who are merely out to use his name, his position, or his signature, then he must do so.
Africa and his group have expressed their apprehensions about Nieto’s capability in retrieving Philcomsat from the far edges of deep space that it has been plunged into. Foremost among their concerns is the possibility that Nieto could be an unwitting tool of those who are out to clean up the last remaining assets of Philcomsat.
Africa disclosed that in 1998, when Nieto was the Philcomsat president, his nephew Benito Araneta was appointed to represent the Government in the board of directors of Philcomsat. As members of the Executive Committee, the uncle-nephew team controlled Philcomsat. In September, 2000, Araneta was removed. But to date, Araneta’s clout and influence is still very much tangible where Philcomsat is concerned.
He also noted that somebody somehow now claims to have the ear of Nieto. Worse, it is reported that this person has succeeded in making Nieto, who is not a lawyer, sign documents the full import of which the latter was never fully apprised of. Which should explain why Nieto is now awash in a sea of legal troubles. An added dimension to this tragedy, Africa suspects, is that Nieto’s family may not even be aware of this person’s machinations; and that, perhaps, they should take notice, lest they wake up one day wondering where the family patrimony has gone.
Legitimate questions, all bearing on the financials and the direction of Philcomsat, are being asked by Africa in behalf of his group, thus:
Why is it that Nieto, without board authorization, paid out the equivalent of P240 million to three foreign suppliers in capital expenditures contracts? That as a result, Philcomsat incurred additional operating expenses and was obligated to pay inordinate dollar amounts for satellite utilization charges and services, equivalent to over P450 million in four years, for which no revenues are forthcoming?
Why is it that Nieto, without board authorization, entered into a real estate transaction without any benefit to Philcomsat, involving P265 million from Philcomsat plus P125 million from Philcomsat’s subsidiary, Philcomsat Holdings Corporation? And that Nieto proceeded to sign the corresponding checks?
Why is it that starting in 1998, under Nieto as its president, Philcomsat experienced its first gross operating loss - after enjoying 25 straight years of remarkable profitability? And that the company has had massive net losses year after year since then?
Why is it that in 1998 the value of the Republic’s shares in Philcomsat was almost P1.4 billion at a book value of P296,000 per share for each of its 4,727 shares, but that presently this has plunged to a measly P175 million at the adjusted book value of P37,000 per share?
Why is it that Nieto and several others from his group are facing a charge for plunder before the Ombudsman?
Why is it that Philcomsat has mounting legal bills and liabilities resulting in expense outlays of approximately P335 million?
Why is it that at the so-called stockholders meeting of Nieto and his group last August 31, he was reported as the presiding officer?
A congressional investigation is necessary to ferret out the answers to these questions. Obviously, Nieto has some explaining to do, and he himself has to speak up. And his must be the voice that speaks, and not anybody else’s. The investigation must commence immediately, to stop the decimation of Philcomsat, as well as address the inefficiency of the Presidential Commission on Good Government and the incoherence of the Securities and Exchange Commission. It is in the national interest as well as the responsibility of the Government, to protect whatever amounts can still be salvaged for the Republic, before all value is lost. The Republic has a big stake, and it should not just stand by and ignore Philcomsat’s being run to the ground.
Last October 10, Nieto’s son Ramon passed away after a bout with liver cancer. Until 2003, Ramon was Philcomsat’s vice-president for administration, and held office just a few doors down from his father’s. According to the Africa group, it appears that Nieto was probably not even aware of the seriousness of his son’s illness; and that during Ramon’s wake, Nieto went about his daily routine of reporting to his Philcomsat office, closely monitored by someone who does not conceal any contempt for a man many years the senior of anyone at Philcomsat.
Africa laments the evil that the young do.
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Why is it that Philcomsat has mounting legal bills and liabilities resulting in expense outlays of approximately P335 million?
Why is it that at the so-called stockholders meeting of Nieto and his group last August 31, he was reported as the presiding officer?
A congressional investigation is necessary to ferret out the answers to these questions. Obviously, Nieto has some explaining to do, and he himself has to speak up. And his must be the voice that speaks, and not anybody else’s. The investigation must commence immediately, to stop the decimation of Philcomsat, as well as address the inefficiency of the Presidential Commission on Good Government and the incoherence of the Securities and Exchange Commission. It is in the national interest as well as the responsibility of the Government, to protect whatever amounts can still be salvaged for the Republic, before all value is lost. The Republic has a big stake, and it should not just stand by and ignore Philcomsat’s being run to the ground.
Last October 10, Nieto’s son Ramon passed away after a bout with liver cancer. Until 2003, Ramon was Philcomsat’s vice-president for administration, and held office just a few doors down from his father’s. According to the Africa group, it appears that Nieto was probably not even aware of the seriousness of his son’s illness; and that during Ramon’s wake, Nieto went about his daily routine of reporting to his Philcomsat office, closely monitored by someone who does not conceal any contempt for a man many years the senior of anyone at Philcomsat.
Africa laments the evil that the young do.
For comments about this website:Webmaster@tribune.net.ph
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