Megawide execs indicted by Ombudsman for Anti-Dummy Law violations
According to Bilyonaryo, the Ombudsman has found probable cause to indict Chairman Edgar Saavedra, Executive Director Manuel Louie Ferrer, and 14 other officers and directors of the GMR-Megawide Cebu Airport Corporation (GMCAC), which is a joint venture that MWIDE and India’s GMR formed to bid on the 25-year concession for the maintenance and operation of the Mactan-Cebu International Airport.
As we reported three weeks ago, Megawide’s [MWIDE 6.24 0.32%] executive team were already indicted by the Department of Justice over allegations that they allowed foreign nationals to exercise control over GMCAC, which they considered to be a “public utility”, in violation of the Anti-Dummy Law.
You can read more about my writeup on that here. Bilyo quotes the Ombudsman as saying the following: “[The MWIDE executives] acted with a common purpose and intention to allow foreigners to manage and operate MCIA... [and] willfully handed the management and operation of GMCAC, and in effect MCIA to foreign nationals by employing foreigners to material functions in GMCAC in violation of the Anti-Dummy Law.”
MB BOTTOM-LINE
Indictments are serious business, but it’s not clear to me how the Ombudsman’s findings relate to the actions that were already taken by the DOJ back in October.
Will the Ombudsman’s finding of probable cause just reinforce or confirm what the DOJ is already doing, or is this an entirely new venue that MWIDE’s executives will have to deal with in a legal sense going forward?
It feels like MWIDE has quickly attracted a lot of attention from the administration, and not the good kind.
In the two days following MWIDE’s DOJ indictment, the stock fell 11% to P6.07/share. It’s since recovered slightly to P6.24/share, but will this push the price back down to DOJ-indictment levels, or will the market just brush this story aside as further posturing from the administration?
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Merkado Barkada's opinions are provided for informational purposes only, and should not be considered a recommendation to buy or sell any particular stock. These daily articles are not updated with new information, so each investor must do his or her own due diligence before trading, as the facts and figures in each particular article may have changed.
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