Will the taipans recover NAIA 3?

I didn't realize that the "emerging dragons" group of the taipans had actually filed suit to enforce their rights on the contract for NAIA 3. My source told me that the taipans are so pissed with the way they were had, they now want to pursue their claim. I don't blame them. They really seem to have been cheated out of the contract, when it was the Ramos administration that wanted them to work together on the project in the first place.

When the taipans were initially shown papers supposedly of the contract awarding the NAIA 3 to PIATCO, they figured the terms were not desirable or even realistic so they decided to forget the whole thing. The taipans were easily prevailed upon to withdraw the case; and they did. The PIATCO bid was way out of line; it was like comparing apples and oranges.

Not too long ago, the taipans got hold of a copy of the present version of the contract, and it was only then that they realized they had been had. They would have stayed on to fight for their stake in the project had the real version been shown to them. What got the goat of the taipans was that, at the time the contract was shown to them, it appeared that major aspects had already been subjected to substantial amendments (which were not reflected in the copy shown to them) and other portions were undergoing similar changes.

Supposedly, the taipans recently got together and have renewed their bonds with each other, and they will be seeking a nullification of the withdrawal of their case on the ground of fraud, misrepresentation, etc. And I guess the taipans are well within their rights to seek judicial redress. I realize the project is now at an advanced stage of construction, but then again, justice must prevail. If it is true that the award was marked by anomaly and deceit, the wrong done must be corrected somehow.

The only thing that bothers me here is that a reversal at this late stage may give the wrong message to investors. But then again, the courts have also ruled in favor of the Gokongweis in the award of the Philippine Shipyard in Subic by the government's privatization body. If that's what it would take to make sure people will think twice about being less than fair in the award of government projects, so be it. We just have to explain why the courts have to make such rulings.

At this point anyway, there is no rush to complete NAIA 3. With reduced air traffic due to Sept. 11, it may just be a white elephant that will also penalize those who will have to use it. It may, in fact, place the rehabilitation of the nation's flag carrier in jeopardy. It is best that the courts review the case and rule on it once and for all.

Accountants

How accountable are accountants? In the light of some dramatic failures here and abroad, the question is always asked about the liability of external auditors. Lately, the same question came to fore with Ramcar, as it had before with Victorias. How come, I have often heard asked, SGV didn't catch impending doom?

In the US today, the big story is Enron, reputedly the biggest failure of all time. And this time, the question being asked is how come Arthur Andersen, its external auditors, didn't catch the problem early enough. Arthur Andersen is the worldwide accounting group to which SGV belongs.

Take this excerpt of a report over the weekend at The Washington Post.

"Lynn Turner, who recently resigned as chief accountant at the Securities and Exchange Commission, said Enron’s original financial statements for the past three years involve clear-cut errors under SEC rules that had to have been known to Enron’s auditors at Arthur Andersen.

"Turner, now director of the Center for Quality Financial Reporting at Colorado State University, said that based on information now reported by the company, he believes the auditors knew the real story about the partnerships but declined to force the company to account for them correctly.

"Why? ‘One has to wonder if a million bucks a week didn’t play a role,’ Turner said. He was referring to the $52 million a year in fees Andersen received last year from Enron, its second-largest account, divided almost equally between auditing work and consulting services.

"Anderson spokesman David Talbot recently described the problems with Enron’s books as ‘an unfortunate situation.’"

The accounting profession has got to have a more satisfactory explanation than the Enron affair being "an unfortunate situation." Government, through the SEC and the accounting profession's self-policing institute, should be able to impose sanctions if they want the practice of accounting to have any real credibility at all.

If we cannot depend on accounting records filed with government regulatory agencies like the SEC, where is an investor supposed to get the information he needs to make the right investment decisions? At least at the casino, you can mathematically calculate your chances. Also, you know you are being had but you just want to be entertained.

Three questions

Reader Marilyn Mana-ay Robles forwarded three "what am I" questions, tricky and naughty but innocent.

Q1: What’s starts with a C and ends with a T, is hairy, oval, delicious and contains thin whitish liquid?

Q2: What goes in hard and pink then comes out soft and sticky?

Q3: What word starts with an ‘F’ and ends in ‘K’ that means a lot of excitement?

Answers: Q1 – Coconut. Q2: Bubblegum. Q3: Firetruck.

What did you guys think the answers were?

(Boo Chanco's e-mail address is [email protected])