Westmont Investment Corp. (Wincorp) debunked yesterday allegations of fraud and misrepresentation made by Pearlbank Securities and its president, Manuel Tan, against the investment firm before the Securities and Exchange Commission (SEC).
In a formal answer filed before the SEC, Wincorp cited documentary evidence showing that the complainants, availing of a credit line signed by Tan and his wife Juanita, borrowed a total of P324 million from several lenders through Wincorp from Nov. 29, 1995 to October 1996. When the credit line was amended, the Tans borrowed from lenders (through Wincrop) an additional P200 million between December 1998 to January 1999, increasing their borrowings to over P524 million.
Wincorp attached to its answer the promissory notes signed by Tan to cover the loans whose proceeds he used by pay several business ventures.
As Wincorp filed its answer to the complaint, its legal counsel, lawyer Leonard De Vera, expressed the full cooperation of the investment house management in any investigation by the regulatory agencies, particularly the SEC. The SEC has created a task force to look into the complaint of Pearlbank and Tan. Wincorp, as a licensed investment house, is under the supervision and regulation of the SEC in accordance with PD 129.
"Wincorp welcomes the investigation by the SEC as this gives the investment firm the opportunity to air its side on the issues raised by the complainants. Wincorp has nothing to hide and has given the SEC access to its books," De Vera said.
He also assured that Wincorp is committed to help settle all the obligations of the borrowers to their lenders. He reiterated the company has been helping in restructuring the loans and that payment plans are being finalized by most of the borrowers.
In fact, a final payment plan has been prepared which allows the borrowers to repay their obligations within a period of two years.
De Vera also disclosed that during the past 45 days, some P800 million of the loans involving about 500 lenders have been settled directly by the borrowers and continuing negotiations between lenders and borrowers initiated by Wincorp are expected to settle more of the outstanding loans. Earlier reports erroneously placed the number of lenders at 2,000. There were only 1,100 according to De Vera.
"The denials by Mr. Tan that he and Pearlbank Securities Inc. incurred and used the proceeds of their loans are indeed unfortunate. The records speak for themselves," De Vera said.
The list of lenders of Pearlbank include Huey Commercial Inc., Jonelen Management and Realty Corp., John Go Beng Huy, and Goson G.B.H. Holdings whose loans were earlier tagged by Tan as non-existent loans. De Vera said Tan received and used the proceeds of these loans but refused to acknowledge the same.
Contrary to the Tans allegations that they were not given the necessary loan documents when they formally asked for the same, Wincorp cited its meetings with the couple on March 9, 13, 14, 17, 21 and 28 this year, during which they were given the documents in the presence of their lawyers and accountants.
Wincorp also debunked Tan's claim that he had no knowledge of any loan transaction. As vice chairman of Wincorp, the firm said Tan was present when the original credit line in favor of Pearlbank Securities Inc. in the amount of P250 million was approved by the Wincorp board of directors. He was also present when the same agreement was renewed and its loan ceiling increased to P850 million to May 29, 1997, during which he signed the minutes approving the amended credit line agreement.
The balance of the complainants' outstanding borrowing is more or less P464 million.
In its answer, Wincorp sought actual and moral damages amounting to more than P70 million.