Osmeña: MVP affidavit, SEC letter show Ongpin guilty of insider trading

Businessman Roberto V. Ongpin entered into a private agreement with tycoon Manny V. Pangilinan to sell Philex shares at P21 per share in late November 2009, an important information that Ongpin did not disclose when he bought over 49 million shares at only P19.25 per share on December 2 of the same year. The private deal between the two entrepreneurs came into financial close on December 7, 2009.

Sen. Serge Osmeña, Chairman of the Senate Banks, Financial Institutions and Currencies jointly investigating the anomalous transactions between various Ongpin firms and the old management of the state-owned Development Bank of the Philippines, said details related to Ongpin's buying and selling of Philex shares in late 2009 were contained in the affidavit of Pangilinan and a letter from the Securities and Exchange Commission, both submitted to Senate President Juan Ponce Enrile.

Osmeña said Pangilinan revealed in his affidavit that he and Ongpin agreed on the P21 per share acquisition cost during their week-long negotiations from Nov. 24 to 27 2009 held at the Shangri-La Hotel in Makati City.

In the letter of SEC Chairperson Teresita Herbosa to Enrile, it was shown that on Dec. 2, or 5 days after the Ongpin-Pangilinan agreement at the Shangri-La Hotel, Ongpin (through the Goldenmedia firm, which he owned) bought 49,964,500 Philex shares in the market at P19.25 per share.

On the evening of Dec. 2, Ongpin and Pangilinan's Two Rivers signed a Share Purchase Agreement (SPA) for the block sale of 452,088,160 Philex shares, at a price of P21 per share, or a total cost of P9,493,851,360.

"Ongpin bought millions of Philex shares a few hours before the SPA was signed, and he bought these shares at a price much lower than the price that he knew that Pangilinan was buying Philex shares. The higher Pangilinan acquisition cost was known only to Ongpin. This is material information that the public does not know. This is clearly insider trading!" Osmeña stressed.

"How can he say that he did not engage in insider trading when he traded Philex shares based on information that only he was privy to? Pangilinan never announced to the public that he was buying Philex shares at P21 per share," he added.

Even the SEC, the senator pointed out, agreed that Ongpin engaged in insider trading.

"Based on the surveillance report of our Market Regulation Department. Mr. Roberto V. Ongpin may have committed insider trading relative to his acquisition of Philex shares through Goldenmedia Corporation on December 2, 2009, in violation of Section 27 of the Securities Regulation Code," the SEC letter to Enrile indicated.

Aside Ongpin's acquisition and selling of Philex shares, the SEC probe also noted that the businessman resigned as Director and Vice Chairman of Philex on Dec. 7 (or 5 days after he acquired and sold Philex shares).

"Mr. Roberto V. Ongpin's affiliation with Philex as Director and Vice Chairman allegedly classify him as an insider as defined under Section 3.8 of the Securities Regulation Code, notwithstanding his resignation on Dec. 7. If considered as such, he may have been in possession of material information not available to the general public when he purchased Philex shares on Dec. 2, 2009," SEC probers said.

"It is absolutely clear that Ongpin is guilty of insider trading. I have more evidence that will prove this, and I will disclose all of these during the hearing tomorrow (Tuesday)," Osmeña said.

The Senate Banks, Financial Institutions and Currencies, along with the Senate Blue Ribbon Committee, will resume its joint inquiry into the P660 million behest loan given by the state-owned Development Bank of the Philippines (DBP) to Ongpin's Delta Ventures Resources Inc. (DVRI) in 2009, which was used to buy Philex shares.