Reacting to accusations from the new management of Belle Corp. that the huge P3.3 billion losses were caused by them, Roberto Ongpin and Jaime Gonzalez said yesterday that "instead of pointing the finger at us, they should be man enough to admit that Belle's mortal wounds are self-inflicted by their inept management."
In a statement to the press, Ongpin and Gonzalez said "when they illegally and treacherously ousted us from the board in June of last year, Belle was well on its way to recovery from the effects of the Asian financial crisis and was riding high on the back of its prospects for its jai-alai project. The Belle stock market price had reached P4.20. We were in the process of concluding three major deals for the Belle Group, which would have solidly established Belle back on the road to prosperity. Instead, with their reckless action of ousting us from the board, and installing themselves as the management of Belle, they effectively killed these three deals. With neither domestic nor international credibility, and no management experience whatsoever other than playing the stock market, the new management quickly found themselves in trouble."
The statement said the heart and soul of Belle is Tagaytay Highlands. With Ongpin, who is undoubtedly recognized as the creator of Tagaytay Highlands, ousted from Belle, sales of club shares, lots, and holiday homes quickly dried up. The evaporation of sales was the fundamental cause of Belle's troubles.
Additionally, the prospects for jai-alai earnings also quickly disappeared. Ongpin and Gonzalez said the new management of Belle failed miserably to realize the potential of jai-alai by allowing other parties to take control of the project. Thus, instead of 1,000 off-fronton terminals, which should have been rolled-out by this time, there are only some 200 terminals operational, and the expected profitability of jai-alai is nowhere near where it should be under proper management.
"Three major deals were killed when we were ousted from the board. The first was a $50-million equity investment by Colony Capital, which Mr. Gonzalez had negotiated, but was aborted when he was ousted as chairman. Secondly, MagiNet Corp. was in the process of being acquired by Pacific Century Cyberworks for a market valuation of $100 million, more than three times that of Belle's original cost. Unfortunately, this was also aborted as Pacific Century did not want to have anything to do with the new management of Belle. The profit from this transaction alone would have wiped out Belle's operational losses for the entire year. Finally, we were in negotiations with two international telephone companies for a $100-million equity investment in PhilCom, which also disappeared into thin air when we were ousted from the board. Additionally, the equipment suppliers and the banks that had financed PhilCom refused to restructure PhilCom's debt and have in fact called PhilCom in default. Thus, instead of finding itself a strong company with a strategic partner, PhilCom is now left floundering," they said.
The big blunder of those that perpetrated the 'coup d'etat' was their failure to realize that they had zero market credibility in terms of running a major and complex corporation like the Belle Group. "It is also unfortunate," Ongpin said, "that the management of the Belle Group seems to devote most of their time to finding ways to bring me and my new Company, PhilWeb.Com down, Fortunately, the market can see through their machinations. They would be well advised, however, "to mind their own store" and devote their energies to rescuing Belle from the brink of disaster," he added.