Overpowering Stench

By Solita Collas-Monsod
Philippine Daily Inquirer
Posted date: October 30, 2009

AS ONE DELVES DEEPER AND DEEPER INTO Sandiganbayan Civil Case 005 against 28 individuals and 40 corporations (including the heirs of Ferdinand Marcos [FM] and Lucio Tan and his corporations), the stench—of corruption, of betrayal, name it—becomes almost overpowering.

Briefly, the case was filed by the Presidential Commission on Good Government (PCGG) in 1987, charging among other things that Imelda Marcos and FM, acting through their dummies, agents, and/or nominees in the persons of Tan and other defendants, acquired beneficial ownership/interest in seven companies, namely (in alphabetical order) Asia Brewery, Dominion Realty and Construction, Foremost Farmers, Fortune Tobacco, Grandspan Development, Himmel Industries, and Silangan Holdings, and any subsidiaries and companies of these operating companies (presumably all of Tan’s business empire).

My understanding is that in her original answer sometime in 1991, Imelda did not deny that ownership, but averred that their acquisition of those corporations did not involve ill-gotten (unexplained) wealth. In any event, the case lay moldering as the plaintiffs amended the complaints, and the respondents answered and then amended their answers.

Then, in 2001, Imelda, in a document titled “Amended Answer with Counterclaim and Compulsory Cross Claim” brought the case to a new level: While still denying that any ill-gotten wealth was involved, she went into the details and extent of the Marcos holdings in the Tan companies.

To hear her tell it, FM had a 60-percent beneficial ownership in the above-mentioned companies, which interests were held in trust by Tan personally and through his family members and business associates who were recorded as stockholders of the companies.

Sometime in late 1980, ownership in these businesses were all consolidated in a holding company named Shareholdings Inc. with the stockholders of these companies exchanging their shares for shares in the holding company.

Shareholdings in turn, or rather its nominal stockholders—and this is how FM got his 60 percent, sometime in 1984—transferred/assigned their stocks to an ultimate set of holding companies: Basic Holdings, Supreme Holdings, and Falcon Holdings, with Basic getting 40 percent and Supreme and Falcon getting 60 percent. The nominal owners of the 60 percent of Shareholdings that went to Supreme and Falcon then executed and delivered to FM blank deeds of assignment.

Copies of these deeds of assignment were presented by Bongbong Marcos when he testified as a “hostile” witness at the Sandiganbayan.

Apparently, the reason why Imelda came out of the closet, as it were, and filed a cross-claim against Tan was that in spite of repeated demands from her, Tan never delivered the shares of stock to FM’s estate in accordance with the deeds of assignment. Who said there was honor among thieves?

But aside from those deeds of sale and assignment in Imelda’s possession (because the deeds of sale were notarized, copies were available at the National Archives—where Bongbong apparently got the certified copies), what other evidence was there to buttress her claim of ownership?

For that, one has only to look at the proprietary behavior on the part of FM in these companies—the amazingly short turn-around time between requests for FM’s intervention, and his action: would you believe one day? Three examples:

1. A letter, dated March 26, 1977 (a Saturday), from Tan to FM, regarding the purchase of General Bank and Trust Co (now Allied Bank). In it, Tan sends an SOS to FM, asking for his intervention in getting the PNB to issue a P310-million standby letter of credit in favor of the Central Bank (CB) as required by the latter. The bids for GenBank were to be opened the following Monday, and without that issuance, Tan would be disqualified. Aside from this request, Tan also mentioned how much his bid would be (whatever for, unless FM was part of it?). Result? On Monday, March 28, PNB president P.O. Domingo sent a letter to the CB signifying that PNB was prepared to issue the letter of credit in favor of the CB to secure Tan’s commitment. Action agad, right? How many bidders were disqualified for lack of that kind of backing? PNB’s single borrower limit at the time, by the way, was only P200 million.

2. A letter dated Jan. 11, 1982 from Asia Brewery to Trade Minister Bobby Ongpin, adverting to a letter written on Jan. 4 to FM which was endorsed to Ongpin, and which obviously Ongpin had not acted on. The letter to Ongpin had a marginal notation from FM, dated Jan. 12, addressed to CB Governor Jaime Laya and Customs Commissioner Ramon Farolan, to the effect that the request could be approved (exemption from duty and taxes for the importation of 60 million bottles).

3. A letter dated May 9, 1984 from Allied Bank (signed by Mariano Tanenglian and Romeo Co) to FM, asking that the Central Bank deposit $50 million with Allied Bank so that it could pay its Middle Eastern creditors. The marginal notation of FM was on May 10, addressed to CB Governor Jobo Fernandez—“I believe the proposal is acceptable.” This when the Philippines was in international debt crisis, and had hardly any dollar reserves. Marcos having proprietary interest in Tan’s companies? Is the Pope Catholic?

Please don’t tell me that that evidence is weak. Please don’t tell me that Tanenglian’s testimony would not have made the government’s case impregnable. The stakes? Sixty percent interest in the Tan empire. And yet the PCGG and the solicitor general are playing to lose.

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