Investors' right to know

Whatever happened to publicly-listed Liberty Telecoms Holdings and its subsidiaries, Liberty Broadcasting Network and Skyphone Logistics, which are under rehabilitation?

Reports have it that Liberty group owner Raymond Moreno has sold his shares to a group led by Qatar Telecoms and some local partners. The money used for the Liberty buyout came mostly from the Qatar company. Moreno however will retain one board seat. How much Moreno got from this sale remains unknown.

Qatar Telecoms is now scouting for a local CEO for Liberty who will be under the watchful eye of the telco’s Singaporean advisers who are already in town, sources add.

But since the Liberty group is under court rehabilitation, such sale and the alleged spending spree of the proceeds by Moreno if true would be illegal unless the act was with the approval of the court-appointed receiver.

It will be recalled that it was Moreno himself who petitioned the court to put his companies under rehabilitation, which the Makati regional trial court has granted over a period of 10 years.

Four of Liberty’s directors from his group have since resigned and were replaced by new directors, mostly lawyers, who are presumably nominees of the new investor, observers note. This change was reported by Liberty to the Philippine Stock Exchange (PSE) and the rehabilitation court in a manifestation it filed last June 11. However, the supposed identity of the new investor and the supposed investment agreement have to date been kept secret and have not been disclosed by Moreno to the rehabilitation court and the public.

Liberty’s creditors and small investors are worried that Moreno has been dissipating the company’s assets to their detriment. It’s about time that the Securities and Exchange Commission and the courts take action for the public’s sake.

GSIS members are asking

There was recent news that the controversial $600-million Global Investment Program (GIP) of the GSIS earned on average a five percent income as of Sept. 30, 2008 or just five months after the funds were invested overseas.

GSIS members now want to know if the foreign management firms handling the $600 million investment where able to secure the money when global markets started crumbling down.

According to GSIS president Winston Garcia, the foreign fund managers of GSIS, namely Credit Agricole Asset Management Ltd. and ING Investment Management, did not invest GIP funds in the US .

Garcia added that the GIP was not affected by the collapse of Lehman Brothers and AIG, “because the funds have been oriented more toward Europe than the US.”

The problem is, the European stock markets have not escaped the painful tremors of the US market collapse. In fact, some of them fared far worse than the US market.

For instance, stock prices at the London Stock Exchange shrank 24.3 percent during the first nine months of the year. There are those saying that assuming the GIP fund was placed in this market since the start of the year, GSIS members lost on average of $145.86 million of the original $600-million value of the fund at the end of Sept. this year.

Observers add that using similar assumptions, the GIP would have been reduced to only $430.92 million if it had been invested at the Paris Bourse (France); to $470.64 million, if in the SWX Swiss Exchange ( Switzerland ); and $434.22 million, if in the Bolsa de Madrid (Spain).

The GSIS actually set aside $1 billion for the GIP, but the remaining $400 million balance has yet to be entrusted to a fund manager. So where was the $400 million kept, observers ask.

But now, GSIS is saying that ING and Credit Agricole actually placed the $600 million GIP money not in Europe — as earlier disclosed by Garcia — but in the US market — as “corrected” later by Garcia himself.

However, the US market likewise is not faring any better than its counterparts in other parts of the world.

Based on available data, the Dow Jones Industrial Average (the main index of the New York Stock Exchange) lost almost a fourth (18.2 percent) of its value for the first nine months of the year. That would have reduced the value of the $600 million GIP by $109.2 million, observers estimate.

Let’s hope that the said GSIS funds are in safe hands, for the sake of our workers in the public sector and their families.

Not so Hidden Agenda

Congratulations to the Arellano University School of Law debating team for winning the “Square Off: The CVC Law Debates” of television station ANC, beating in the process classic archrivals Ateneo de Manila and UP Diliman.

Three debaters from the Arellano Law Forensic Guild won against the Ateneo de Davao debating team in the final round of the ANC Square Off with the proposition, “Let it be resolved that: The term of elected local officials should be lifted.”

The Arellano team includes Rochelle Marie Roxas, Luis Anthony Warren, and Charles Francis Decangchon. Warren was adjudged as the Texter’s Choice for Best Speaker and the Judges’ Choice as Best Speaker during the final match.

The panel of adjudicators included a member of the Philippine Judges Association, a senior partner of the CVC Law Firm, and an expert on the proposition.

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