Finish BW probe by March 25, Yasay told

President Estrada ordered outgoing Chairman Perfecto Yasay Jr. of the Securities and Exchange Commission (SEC) to finish his probe on alleged insider trading activities at the Philippine Stock Exchange (PSE) before he steps down on March 25.

Mr. Estrada told a press conference at Malacañang yesterday that Yasay is apparently using the ongoing investigations as a reason to extend his stay in office.

He said Yasay could very well terminate the investigations in less than a month because the PSE already submitted its findings and recommendations on alleged stock price manipulation by presidential friend Dante Tan, chairman of Best World (BW) Resources Corp.

"If Yasay starts his investigations on Monday, he can finish it within a month if he conducts his hearings everyday," the President said. "There is a complete record from the PSE. He can get all the records and he can finish it in less than a month."

Results of a PSE investigation showed that Tan made about P820 million from January to June last year when he bought about 414.2 million shares and sold 256.8 million shares.

It said that Tan committed "manipulative schemes and devices" to create "an illusion" that BW was heavily traded. It thus artificially pushed the price of BW upwards until the market gained its own momentum and the investing public was ultimately drawn in.

"Dante Tan created the illusion that there was active trading in BW shares by wash sales, causing massive transfer of his shares over the counter to many of his associates and using private placements to generate funds for his buying transactions and at the same time squeeze BW shares out of the market to create an artificial shortage," the report said.

In preparing for his "scheme," Tan opened 21 accounts with 14 brokers using his name and coded account names, the PSE noted.

There were actually 51 companies that traded BW shares, but only eight brokers were named by the PSE report.

Among them are the PCCI Securities Brokers Corp., A.T. De Castro Securities Corp., Asiasec Equities Inc., Securities 2000 Inc., Angping and Associates, Quality Investments and Securities Corp., Guild Securities Inc. and Armstrong Securities.

A number of stock traders are wondering why the PSE did not include other brokers in the investigation, including Wealth Securities of former PSE chairman Wilson Ty and current PSE chairperson Trinidad Kalaw's First Orient Securities.

Kalaw, who also chairs the PSE's business conduct and ethics committee (BCEC), said the eight brokers will be asked to present their defense before the committee decides on possible administrative sanctions to those found guilty of stock price manipulation.

The BCEC will meet on Tuesday to hear the explanations of these brokers and it expects to wrap up its proceedings in a week.

However, Kalaw said their investigations could stretch until March 4 because of the tedious process involved.

On March 4, the PSE is set to elect its new board.

Meanwhile, President Estrada said another possible candidate to replace Yasay as SEC chief is Trade Undersecretary Lilia Bautista.

He said Bautista's name cropped up after former Negros Occidental Rep. Margarito Teves declined his offer to replace Yasay.

Mr. Estrada expressed belief that Yasay's resignation from his post on March 25 would help reinvigorate the stock exchange.

Share prices dropped 2.2 percent last week to a 10-week low due to a massive selldown triggered by the PSE report on insider trading and price manipulation.

Brokers said the opening bell signaled a bloodbath after details of the PSE report were splashed across the nation's newspapers and the world's financial pages, with foreign fund managers leading the sell-off. --