Trade and industry Secretary Manuel Roxas II, expressed optimism that the infighting at the Small Business Guarantee and Finance Corp. (SBGFC) would be resolved soon as the top officials of the state-owned corporation have taken a voluntary leave of absence while the conflict is being resolved.
In a recent interview, Roxas said the break afforded by the leaves of absence filed by SBGFC chairman Jose Orosa, executive vice president Marietta Tan and vice presidents Remigio Tirones, Elsa Benavides and Geraldine Rodriguez, would allow a full and impartial investigation and resolution of the conflict once and for all.
The group led by Tan had asked President Estrada to remove Orosa from office on charges of "incompetence, arrogance, petty despotism and utter disregard of the rules and regulations governing SBGFC operations."
The group blamed Orosa for the plunge in SBGFC's earnings from P64 million to only P37 million between October 1998 and October 1999, as well as the approval of loan applications by friends in the Christian born-again movement.
The Tan group alleged that Orosa approved spurious loans to Deeper Life Foundation (P1.2 million), Cake Greetings Corp. (P500,000) and some P10 million unsecured loan guarantee to Issho Gengki as well as P20 million to TML Garments which was shut down in 1996.
Orosa, however, countered that his administration had actually improved the quality of reviewing guarantee payment calls resulting in the denial of calls amounting to P36.886 million due to serious violations of conditions or breach of warranties and representations.
Orosa also said SBGFC's profits declined because of a P23.94 million provision for loan losses in 1999 compared to only P11.7 million in 1998.
Revenues contracted as Treasury bill rates averaged 8.15 percent last year compared to 11.65 in 1998.
"There was also a reduced uptake of our programs due to the contraction of loans from all banks," he said.
Orosa also defended the loans questioned by Tan. The Deeper Life loan, he said, was properly secured by a mortgage of the owner's valuable asset in Davao City worth P10.63 million. He said the project was an educational program which was qualified for funding under the law as long as it was accredited by the education department.
Orosa said the loan to Issho Genki, on the other hand, was unanimously approved by SBGFC members, including the Tan group. He admitted that he knew the owners of the company but hastened to add that he "saw no reason why I should discriminate against a borrower who needs assistance just because I know him."
Orosa said Issho Genki was eminently qualified and all the loans and bank accounts were handled satisfactorily. On the other hand, he said SBGFC never approved a loan to TML Garments.
Orosa also pointed out that SBGFC originated a total of 197 wholesale financing accounts with an aggregate value of P2.321 billion. "Issho Genki was but one account equivalent to 0.39 percent of the total," he said. "Charges of preferential treatment is therefore quickly discredited and dismissed if you consider the above statistics."
Orosa complained that the Tan group has been circulating a number of "white papers" against him, one was even sent to his wife accusing him of infidelity.
"Several faithful and decent members of the SBGFC staff are being harassed with telephone calls and text messages involving threats, foul language and sexually implied propositions," he said. He added that his questioning of the SBGFC's purchase for P126 million by Tan of two floors at the Antel Corporate Center started it all.