Much ado

There is such a thing as the economies of scale — even as the romantic disposition is to see small as beautiful and big as bad.

When PLDT acquired P74.1 billion in Digitel shares, the last remaining competitor sought regulatory relief, basically asking the National Telecommunications Commission to nullify the deal. The deal produces a PLDT-Digitel alliance that accounts for about 70 percent of the mobile gadgets market. A spokesman for PLDT described the move as “regulatory blackmail”: an attempt to use non-existent regulatory stipulations to get in the way of the ordinary course of business.

Asked about the deal by reporters, Palace functionaries gave what has become a stock answer: they will investigate the matter. In the Orwellian language of the new dispensation, this basically means the Palace knows very little about what happened, cannot make head or tails of the deal, and, with its usual inertia, will probably do nothing about it.

Indeed, nothing needs to be done about it.

Senate President Juan Ponce Enrile, a man most knowledgeable of the law, puts it forthrightly. There is no law violated by the deal and therefore no need to investigate it.

Except for its impressive size, PLDT’s acquisition of Gokongwei shares in Digitel is in the ordinary conduct of business. There is not even a franchise issue here which might invite congressional interest. Both PLDT and Digitel retain their respective franchises. PLDT did not purchase Digitel’s franchise, only a controlling portion of the company’s shares.

Enrile explains it succinctly: “Gokongwei is just an investor, a stockholder of (Digitel). He is not the holder of the franchise. He was not selling the franchise. He was selling the business that he owns. He was selling his shares of stocks to Smart and PLDT.”

True. For the humungous amount of P74.1 billion, PLDT-Smart acquired 51.56 percent of Digitel. The only regulatory requirement is that PLDT makes a tender offer to the minority shareholders. Very likely, given the prospects of profitability, the minority shareholders will hold on to their shares.

It will not be accurate to describe this deal as a merger of two competing companies. Digitel will retain its corporate integrity and compete with both Smart and Globe. There will still be three major players in the industry. Soon, when San Miguel is ready to join the fray, there will be four competitors.

In an open market and a liberalized industry, any punter can buy shares in any or in all of the telecoms companies. There is no law against that. I can do that tomorrow, acquire and hold stocks of all the players in a sunrise industry — although, of course, I am a miniscule investor and nobody pays any attention to the stocks I collect.

PLDT is doing what many small investors do, except that it does so on a major scale: collect stocks across various companies in a sunrise industry. For as long as Digitel is professionally run (which is to everybody’s interest), the competitiveness in this rapidly transforming industrial sector should not be diminished.

All the political noise being made about this deal is much ado about nothing.

Murky

The investigation of the killing of broadcaster and environmentalist Gerry Ortega, it seems, gets murkier by the day. More and more, Palawan’s quirky local politics seems to be coming into play.

One broadcast network has invoked Gerry Ortega’s death in its campaign against logging in Palawan. That might have its merits: Ortega was indeed an anti-mining activist. But the network’s campaign does not make a complete disclosure about Ortega: he was also a player in the local politics of the province.

In the 2004 elections, Ortega vied for governorship of the province, pitted against Joel Reyes and Vicente Sandoval. Reyes won that contest.

In the subsequent elections, Ortega was aligned with the political faction of Jose “Pepito” Alvarez and Puerto Princesa mayor Edward Hagedorn. Joel Reyes beat Hagedorn in the gubernatorial elections of 2001 and was a major factor in Abrahan Mitra’s victory over Pepito Alvarez in the 2010 elections.

Reyes, whose name was dragged into the investigation of the killing of Ortega, now complains of the extraordinary interest and outright involvement in the investigation of his rivals Alvarez and Hagedorn. The complaint stems from an affidavit issued by Percival Lecias, now held as witness for the role he played in purchasing the gun used in the murder.

Lecias complained to the Commission on Human Rights about how he was being threatened by NBI agents handling the case. In his complaint, Lecias claims seeing Hagedorn and Alvarez visiting the NBI unit where he was held, bringing with them two large attache cases allegedly filled with cash. The cash was later divided up among the personnel involved in the investigation.

These are very serious accusations. The DOJ should at least look into the allegations being made, not the least because they could influence the outcome of the investigation.

That investigation looks vulnerable as it stands. Principal witness Rodolfo “Bumar” Edrad Jr., is kept under the Witness Protection Program of the DOJ notwithstanding glaring inconsistencies in his claims.

Bumar stated there are no pending complaints against him. But the PNP recently tried to serve on him a warrant of arrest for the murder of one Walfredo Martillano.

Bumar also claims to be a former Marine discharged from the service for involvement in the Oakwood mutiny. The Public Affairs Office of the Philippine Marines says, however, they have no record of this man ever having been in the service.

His story gets murkier as more facts surface.