SSS head replaces Romualdez as chairman of Equitable PCI

BY Ma. ELISA P. OSORIO, BusinessWorld Reporter The controversy continues in the country’s third largest lender as Social Security System (SSS) President Corazon dela Paz assumes chairmanship of Equitable PCI Bank, replacing Ferdinand Martin Romualdez. The changes happened on Tuesday during the bank’s weekly board meeting, wherein its 15 directors raised no objections and voted unanimously for the reorganization. Mr. Romualdez, who represents his family’s 8% holding under Trans Middle Equities, reverted to his old position as vice-chairman. Also sitting as vice-chairmen are Government Service Insurance System (GSIS) General Manager Winston F. Garcia and Teresita T. Sy, a nominee of the Banco de Oro Universal Bank. "The reorganization came as a surprise. It was supported by [Banco de Oro]. I just hope Cora dela Paz will continue to protect the interest of SSS and GSIS as I did," Mr. Romualdez told BusinessWorld in a telephone interview. BusinessWorld sources said SSS wanted to assume chairmanship as it has a 25.6% stake in the bank. Groups controlled by mall magnate Henry Sy owns the biggest chunk of Equitable PCI at more than 34%. In a statement, Ms. Dela Paz said, "I am optimistic that the bank will move forward in a strong way because we are seeing growth in our economy this year and I hope on the medium to the long term." Sources at the bank said Ms. Dela Paz was deemed the right choice for chairman given her background as a certified public accountant. They also said she would better understand the bank’s needs in light of the implementation of the International Accounting Standards. Also yesterday, the board accepted the resignation of Banco de Oro board representative Vicente L. Panlilio from the bank’s board. Mr. Panlilio reportedly resigned last Friday after voting against Banco de Oro on the issue of whether the bank should auction the 10% treasury shares held by subsidiary EBC Investments Inc. together with the GSIS’ 12.15% holdings that the pension fund offered to sell by March 6, 2006. Ms. Sy has been vocal of her position of retiring the treasury shares -- or stocks that have been re-acquired by the company, either through repurchase or donation, and stored in its treasury. The Bangko Sentral ng Pilipinas ordered the bank late last year to either sell or retire the shares. Retired shares can’t be voted on or be traded. GSIS wanted to sell its stake together with the retired EBC shares in order to justify its asking price of P92 per share. A premium is given for bulk shares sale as it comes with board seats. Equitable PCI shares last traded for P64 apiece, down from the previous day’s P64.50. Lawyer Edmund Tan was tapped to replace Mr. Panlilio. Other members of the board are Ramon J. Jabar, Fulgencio S. Factoran, Jr., Ma. Luz. C. Generoso, Nazario Cabuquit Jr., Reynaldo P. Palmiery, Exequiel P. Villacorta, Josefina N. Tan, Rene J. Buenaventura, Anthony M. Te and Jesus G. Tirona. In a statement, SM Investments Corp. and Banco de Oro said they welcome the assumption of Ms. Dela Paz and has expressed confidence in her capabilities. "[Ms.] Dela Paz’s chairmanship bodes well for the bank as it came at a time when the new international accounting standards will be enforced and applied to all banks in the Philippines," the statement said. Banco de Oro had offered to merge with Equitable PCI with the Sy-led bank as surviving entity. The proposal was opposed by major shareholders of the bank, including Mr. Romualdez. SSS has a pending deal to sell its stake in the bank to the Henry Sy group. The court has yet to decide on the legality of the deal following opposition from various sectors.