Ex-president’s finance chief Teves has a lot of explaining to do -- Osmeña

IN tomorrow’s Senate hearing on the grant of a questioned $180 million syndicated government loan to a $2 company controlled by groups linked to businessman Roberto V. Ongpin, former Finance Secretary Margarito Teves will be asked to shed light on his and former President Gloria Macapagal-Arroyo’s roles in the transactions.

“Secretary Teves has some explaining to do before the committees. Documents show that he authorized the grant of the $180 million to GAS in 2008. The approval of this loan was not only unusual, but was also outrageously irregular. Only in the Philippines would a bank process and approve a loan for a still unknown borrower,” Sen. Serge Osmeña, chairman of the Senate Committee on Banks, Financial Institutions and Currencies, said.

The senator had earlier disclosed that Development Bank of the Philippines approved $90 million (P3.8 billion) in loans in December 2008 despite the absence of a credit application and a loan applicant. The money was released three weeks after its approval to a foreign firm called Global Air Services or GAS, an Ongpin-affiliated company that was not licensed to do business in the Philippines.

Osmeña had said that GAS used the money to buy stocks and bonds related to the Metro Rail Transit Corporation (MRTC), including those held by two other companies, Presidio Capital Holdings Limited and two Ashmore funds, both linked to Ongpin.

Teves was then concurrent Secretary of Finance and ex-officio Chairman of the Land Bank of the Philippines in 2008 when the questionable multi-million dollar loan was granted to GAS, a company registered in the British Virgin Islands but which has no financial capacity to borrow. Its 2005 financial statement showed it only had an authorized capital of $50,000, with paid-up capital  of only $2, a net loss of $403,509, assets of $5,364 and a liability of $408,871. Its authorized signatory in the loan agreements with the DBP and the LBP was Josephine Manalo, who is the long-time secretary of Ongpin.

Osmeña said he would ask Teves to rationalize the issuance by former President and now Rep. Gloria Macapagal Arroyo of Executive Order No. 855, which laid out the guidelines for a government take-over of the operations and management of the Metro Rail Transit 3 project, through the National Development Company.

“Teves must explain this Executive Order which, if taken at face value, gives the impression that the $180 million syndicated loan given to GAS is a behest loan, with Gloria Macapagal Arroyo and Secretary Teves themselves as the behestors,” Osmeña said.

Osmeña’s Senate Banks Committee, along with the Senate Blue Ribbon Committee, is jointly investigating the P660 million alleged “behest”  loan given by the DBP, during the incumbency of the old Board led by former President Rey David, to Delta Ventures Resources Inc. (DVRI), which is owned by Ongpin, a close friend of former First Gentleman Jose Miguel Arroyo.

The joint committees will resume its inquiry into the DBP transactions tomorrow at 9 a.m. in the Senate session hall.