SEC revokes license of Prudentialife

MANILA, Philippines - The Securities and Exchange Commission (SEC) has revoked the dealer’s license of Prudentialife Plans Inc. for its failure to meet a required asset build-up.

“The dealer’s license has been revoked, they have been instructed to stop selling,” SEC chair Fe Barin told reporters yesterday after a Senate hearing on the status of Legacy Group.

“They have been asked to conduct the inventory of the registered securities (and) to continue without fail servicing policies that mature, or their obligations, for instance, to those that are fully paid and availing (of reimbursements),” Barin said.

“They have submitted a multi-year build up (plan). Unfortunately, the assets are not eligible. We have classifications for instance if it’s going to be real estate, it should be earning,” Barin explained.

When asked what advice she could give planholders, Barin replied she didn’t know at the moment.

In a statement, Prudentialife said SEC’s order took effect on April 16 but that it continues to operate “as a servicing pre-need company and pay plan benefits of our planholders as warranted.”

Jose Alberto Alba, Prudentialife Plans president, said in a statement that it submitted a Multi Year Capital and Trust Fund Build-up Program last Feb. 2 but the SEC rejected it “because the assets we offered for contribution to the trust fund and capital does not qualify as acceptable assets under the SEC revised program.”

“Under the revised program, the acceptable assets that can be contributed to the trust fund and capital are income generating real estate and unlisted shares that are not in any way related to the Pre-need company,” he said.

“The assets we offered are real estate properties that have good values but are not yet income generating,” he clarified.

“We hope that these developments will be temporary owing to the prevailing economic environment and government efforts to institute much needed regulatory reforms,” he said.

Contempt for snub

With his failure to show up at yesterday’s hearing on the Legacy mess, Celso de los Angeles may be jailed for contempt, according to Senate president Juan Ponce Enrile.

“He should even be jailed here for contempt,” Enrile said. De los Angeles, who is also mayor of Sto. Domingo, Albay, is the owner of the Legacy Group.

Enrile also lashed out at the SEC and Department of Justice (DOJ) for failing to do their jobs in ensuring that the investments of the Legacy planholders, including some 12,000 military and police personnel, were protected.

“You better (look into this) because 12,000 soldiers are enough to overthrow this government, including the SEC,” Enrile said.

Enrile also chided Justice Assistant Secretary Jose Arturo de Castro for the slow progress of the cases filed with the DOJ and various prosecutors’ offices in the country.

De Castro said only about six cases have been recommended for resolution in Cagayan de Oro while several others remain pending in the prosecutor’s level. “How soon can you expect a live case? Where is your supervision and control over your people?” Enrile asked.

Enrile also questioned the ability of the DOJ Task Force created to monitor the cases to function effectively, considering that it only has 10 prosecutors as members. He said it is impossible for the 10 task force members, including its leader Cavite Prosecutor Emmanuel Velasco, to address the complaints.

“I am telling you, if that’s the procedure, we’re as good as dead,” Enrile said.

Sen. Manuel Roxas II, chair of the Senate committee on trade and commerce, said De los Angeles faces arrest if he skips the next hearing, where he is expected to submit his Statement of Assets and Liabilities as well as a written waiver on the secrecy of his bank accounts.

De los Angeles is facing a wave of charges for allegedly siphoning off millions of pesos from planholders and depositors of Legacy’s collapsed pre-need firms and rural banks.

The Legacy Group’s shuttered pre-need firms have P1.1-billion worth of unpaid obligations to about 50,000 plan holders.

Last year, 13 of Legacy Group’s rural banks were closed and were placed under receivership or liquidation. The Bangko Sentral said these banks have “insufficient assets to cover their liabilities, suffer from severe liquidity problems, and perform unsafe and unsound banking practices.”

At the Senate hearing yesterday, Roxas also scored the SEC for its reported failure to implement reforms in its regulatory functions.

“There is substantive change in the SEC regulation from the time the Legacy (scandal) erupted until today,” Roxas said.

Roxas lamented that as much as P11.5 billion in bank deposits in the Legacy rural banks could no longer be found and are deemed to have been lost due to ineptitude of some government agencies.

“The chances of recovering the money are getting slimmer,” he said in Filipino.