PTIC Bulag

Former Philippine Ambassador Extraordinary and Plenipotentiary to the United States Albert de Rosario is the consummate diplomat. Dignified, gracious, statuesque in both bearing and principles, ever well-mannered, even among rambunctious board meetings, his counsel is civil, calm, and, most of all, valued. It then comes as disconcerting when he is depicted a thug, with armed men barging in the middle of ungodly hours to threaten and “take” from the similarly-statured.

This is among a number of inconsistencies surrounding the ownership issues of the Philippine Long Distance and Telephone Co. (PLDT) involving shareholders from the Philippine Telecommunications Investments Corporation (PTIC).

A result of blindsiding, fallacies fornicated from fiction can convolute into labyrinthine mosaics sufficient to stain sterling stature, not to mention the truth. Fortunately, answers lie with verifiable truth.

In the PTIC controversy, avoiding judgment, we will match realities against the insinuated however published as truth or a facsimile of it.

First, the recorded data. PTIC was registered in November 1967 to purchase controlling interest in PLDT from General Telephone and Electronics Corporation (GTE). Its incorporators were Alfonso Yuchengco, Leonides Virata, Antonio Meer and Ramon and Imelda Cojuangco. Together with Luis Tirso Rivilla, the latter two held 57%, Yuchengco, 7% while Virata, Meer and Gregorio Romulo held 3% apiece. GTE retained 22.5% as partial payment bringing capital stock to 72% foreign and 28% PTIC.

After declaring martial law, Ferdinand Marcos issued P.D. 217 ordering all PLDT subscribers to invest in preferred non-voting PLDT stock which eventually comprised 85% of PLDT’s total equity. Following the substantial equity infusion, the World Bank proposed integrating all telecommunication services and installing a monopoly franchise. This opened funding avenues. From 1969 to 1982 PLDT accrued over US$ 594.50 million in foreign debt.

During that period old-timers might recall the non-expansion of the PLDT network where, even in Metropolitan Manila, it could take as long as 10 years to get a line installed. Critics then ask how the debt was spent and how PLDT was managed prior to the competitive liberalization and telecommunication growth policies during the Corazon Aquino administration.

In 1977 the U.S. Securities and Exchange Commission filed charges against GTE and PTIC for violating federal securities laws. The following were revealed. One, PTIC lacked the financial capacity to purchase the GTE holdings. Two, GTE lent to PTIC officials in exchange for exclusive long-term equipment contracts. Three, the contracted GTE equipment were either overpriced, priced depending on commissions charged, or second-hand.

However, in 1986, reversing from its previous initial position, the PCGG denied that there were management anomalies. It also denied the existence of dummies although earlier in the Aquino administration, they identified Prime Holdings Inc. (PHI), which eventually owned 46% of PTIC, a Marcos shell company.

At that time, to stay sequestration, one PTIC principal claimed “not all of the Prime Holdings and Cojuangco shares were theirs”. He said he was “coerced” into cooperating with another shareholder.

Eventually, following Yuchengco versus Sandiganbayan, (G.R. Nos. 149802, 150320, 150367, 153207, and 153459, January 20, 2006, 479 SCRA 1), the Supreme Court declared that the Republic was the owner of 111,415 PTIC sequestered shares formerly registered under PHI.

By 1998, 47% of PTIC had been purchased. Forty-four percent from Cojuangco. Three percent from Meer.

Today’s controversy centers on an unsigned statement of a third PTIC shareholder declaring “shares (7.75% PTIC holdings, equivalent to 2,017,650 PLDT common shares) were TAKEN…in 1998 through SHEER INTIMIDATION and serious threat”. (caps supplied)

How disembodied are the demons conjured when “taken…through sheer intimidation” is evoked? Note that coercion had also been previously invoked in connection with PHI and PTIC.

In exchange for 7.75% PTIC shares, the 1998 compensation comprised 2,017,650 shares of directly held PLDT commons then valued at Php 2.19 billion, plus Php 424.037 million cash equal to a 19.37% premium. At recent closing prices of Php 2,330.00 per share these commons, now valued at Php 4.70 billion, appreciated 115%.

Add two-thirds of PLDT’s non-life insurance requirements and the property insurance business of PLDT subsidiaries. Add also the un-monetized benefit of constant 11-year nomination and voting support for the daughter of the represented principal.

The original 7% shares in PTIC, the subject of today’s controversy, represented 0.25% of PLDT’s total shareholdings with 1.70% voting power. In exchange for its sale, among other compensatory perks, direct PLDT equity virtually replaced indirect holdings.

This is important. That there was fair compensation, even more. In the purchase of PTIC, while PTIC controlled only 3.69% of total PLDT stock, these shares represented 25% of PLDT’s total voting stocks. It was a question of critical block voting power purchased with due compensation paid beyond the 19.37% premium.

Are these consistent with the “taken through sheer intimidation” verbiage? As disconcerting as the accusations against Del Rosario are, so are misconceptions against verifiable reality.

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