MANILA,  January 13, 2004 (STAR) BY THE WAY By Max V. Soliven - The other day, the surprise and secretive "sale" of the 29 percent shares belonging to members of the Social Security System (SSS) in the giant Equitable PCIBank looked very bad. Now, with more facts coming out, this fast-break deal looks horrid.

I was wrong in yesterday’s article. I had said that the purchasing group belonging to the Henry Sy SM group and Banco de Oro was going to pay for those delicious SSS shares in six years on an installment basis. Wrong. The lucky group isn’t putting up any money "up front". They’ll get the shares, and pay for them ONLY AFTER SIX YEARS!

Yahoo, and sanamagan! If I were offered a sweetheart deal like that, I might myself be able, poor little me, to whip together a wealthy consortium to grab those shares – and, in the near future the mammoth bank itself at a much better price.

And think of the rosy future of our still fictitious "consortium"! We’d end up operating the country’s possibly biggest bank, making money handsomely out of this, without having to pay up for six long years.

Why, that would be virtually "after" the entire second term of the GMA Administration, IF La Gloria is re-elected.

With deals like that occurring in the waning months of this term, how can GMA get re-elected? Heads up, Madam President. Your Administration is being blamed for deals like this one.

Once it dawns on them how easily their shares in the Equitable PCIBank were frittered away, millions of SSS members, men and women like you and me, would be up in arms. The deal, concluded by SSS management during the Christmas "holiday" season, when nobody was looking, with the very, very fortunate "winners", is not small potatoes.

Why the . . . uh, discretion and lack of publicity during the negotiations? One ranking SSS official tried to explain that it was because they didn’t want anybody to take advantage of the "insider" information in the stock market! Hello.

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Our friend, SSS President Cora de la Paz, called me up yesterday to declare that the agreement had been made in good faith and in the best interest of the SSS members.

How so? Because, she said, those shares in the bank were not earning enough for the SSS, and a bigger profit would be realized through their sale. How’s this? In six years’ time? "By that time, Cora," I exclaimed, "you’d be long gone from the SSS presidency."

But the SSS membership will be out of pocket long before that.

Ms. De la Paz, whose personal integrity I don’t question (but what about the guys who coaxed her into the deal?), maintains she got a good price for the shares which were trading at only P33 to P34 per. Instead, she pointed out, SSS management got the Sy Group and Banco de Oro to buy at P43.50 per share at a premium rate. I think that Cora and her fellow SSS management geniuses (particularly with the SSS President’s rich experience as head of Cunanan-Price Waterhouse in the old days) ought to get the big picture,.

If somebody could purchase P8 billion worth of SSS shares in a mammoth bank at one blow, and pay ONLY AFTER SIX YEARS, that would be hallelujah! It would be "money in the bank" without initially having to put any money in the bank.

I think that it is necessary to explain the awful implications of that weird transaction, hammered together in such a clandestine fashion. Were the Gokongwei’s, Ty’s, Tan’s, and other experienced bankers not invited to enter their "bids" too – with such an attractive, even irresistible terms on offer – or the public called in to see who’d top the Banco de Oro proposal?

"At one point," SSS President de la Paz told me yesterday, "the offerers (the Sys and Banco de Oro) threatened to "withdraw their offer". Therefore, she explained, the SSS management had to make a decision.

So what if the "offer" had been withdrawn? Would the SSS have collapsed? The explanation, with due respect, doesn’t make sense.

Cora revealed that those SSS shares in the bank represented as much as ten percent of the SSS assets and were, to paraphrase her, almost stagnant. Gee whiz. Now, ten percent of the SSS assets will be gone – and not paid for, unless I’m mistaken, UNTIL AFTER SIX YEARS.

Pardon my arithmetic, but it doesn’t seem to add up. Even if, with accumulated "interest", the final payment might have come up to P14 billion, the bank’s shares might have doubled in value next year giving SSS a more massive profit!

One thing the SSS President told me, too, yesterday is even more interesting – and may open a window for back-pedaling (I didn’t say, mind you, back-Pidaling). Cora declared, in a short consuelo de b. to reassure me, the deal is "not yet a done deal". I asked her again, to make certain: "NOT YET A DONE DEAL?"

Cora stated that the transaction must still have to be reviewed by the SSS Commission, i.e. the Social Security System’s board of directors. Betcha this would have been merely pro forma – forgive my jaundiced and malicious eye – and it would quickly have been rubber-stamped. But now, SSS Chairman Bernardino Abes and the SSS Commissioners have a slim chance to extricate themselves by rejecting it.

If you’ll recall, Chairman Abes was Secretary of Labor in the Cabinet of GMA’s father, President Diosdado Macapagal. C’mon, Bernie. Do you want to cap your long, long career with this dubious kind of multibillion-peso caper?

Remember, if some SSS members get mad and bring up a charge of "plunder" (anything above a measly P50 million, only!), the penalty is "death". Plunder, like the case pending in the Sandiganbayan against former President Joseph Estrada is a capital offense. Susmariosep. The whispers already going around on the SSS deal (I didn’t even say "scam" yet) are ominous.

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A final hurdle, too, as Ms. Cora de la Paz candidly pointed out to me yesterday, would still to have the Banco de Oro move approved by the Monetary Board of the Bangko Sentral ng Pilipinas.

Attention, BSP Governor Rafael Buenaventura, who was recently named by a top magazine abroad "Central Banker of the Year". Are you going to become the Kulelat Central Banker of the Year 2004? Paeng, after all, was already almost deep-sixed by the Court of Appeals on the Urban Bank imbroglio – but, thankfully, the Supreme Court rightfully vindicated him and his fellow BSP top brass. Now comes the Banco de Oro-SSS deal, intimately impinging on the future recovery or decline of the huge Equitable PCIBank.

How will Buenaventura and the Monetary Board handle this hot potato? Beware this Ghost of Christmas Just Past.

There may be no truth to the spreading and salacious speculation that P1 billion "exchanged hands" all the way up to – my, oh my – but, hey. In a hot election year, with campaign funds being built up, any whisper travels around faster than you can pronounce, "GMA-7" (mind you, that’s the television station). As they say, "SAKSI" or not to be.

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THE ROVING EYE . . . The wedding of Lea Salonga and Los Angeles businessman Robert Chien in that city’s Cathedral of Our Lady of the Angels was "a very elegant affair". That’s what my wife, Dr. Preciosa S., told me on the phone yesterday. The reception afterwards at L.A.’s storied Biltmore was splendid, too, she enthusiastically added. Precious had flown to L.A., because Lea had been one of her pet protégés in O.B. Montessori. Lea, who first enrolled in O.B. Montessori Angeles in casa as a three-year old, later was moved by her dad, Capt. Fil Salonga and her mom, Ligaya (Bebeng), to O.B. Montessori Greenhills, where she grew up. She was our scholar for 13 years, from grade school to high school, graduating valedictorian. Tita Precious, of course, was in a front row pew and sat with mom Bebeng during the reception. She’s happy she got to attend, along with our daughter Marinella who lives in L.A. . . . In her role as Ambassador and UNESCO Sec-Gen for the Philippines, Precious is the guest speaker today of the Cerrittos Rotary Club in L.A., with our columnist Ernie Delfin the incoming Centennial President of the Club. She’s talking on the future of Philippine education. Pardon the personal note. P.S. We bought her tickets, not UNESCO.

Reported by: Sol Jose Vanzi

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