Senator: MVP affidavit shows Ongpin guilty of insider trading

By KIMBERLY JANE TAN, GMA News

Published December 6, 2011 11:00am

An affidavit executed by business mogul Manny Pangilinan and a letter from the Securities and Exchange Commission (SEC) indicate that businessman Roberto Ongpin is guilty of insider trading, Senator Sergio Osmeña said on Tuesday.

In a statement, Osmeña said Pangilinan revealed in his affidavit that in a meeting with Ongpin in late November 2009 at the Makati Shangri-La Hotel, he agreed to buy shares of Philex Mining Corporation at P21 per share.

Osmeña said Ongpin did not disclose this information when he bought over 49 million Philex shares at a lower price on December 2 the same year. "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!" said Osmeña. "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. Osmeña likewise said a letter by SEC Chairperson Teresita Herbosa to Senate President Juan Ponce Enrile stated that five days after the Ongpin-Pangilinan agreement, Ongpin (through his firm Golden Media) bought 49,964,500 Philex shares in the market at P19.25 per share.

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

SEC report

In a previous Senate hearing, Ongpin had already denied engaging in insider trading. Osmeña, however, said even the SEC 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 said. "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," it added. Osmeña also said that the SEC noted that Ongpin resigned as director and Vice Chairman of Philex on December 7, or five days after he acquired and sold Philex shares.

"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,” he said. Insider trading is prohibited under Republic Act No. 8799 or the Securities Regulation Code and is punishable with imprisonment of not less than seven years but not more than 21 years or a fine of not less than P50,000 but not more than P5 million, or both depending on the court. Recovery of short-swing profits In a separate statement released Tuesday, Osmeña said Pangilinan can still recover the short-swing profits amounting to around P412 million that Ongpin "unduly earned" trading Philex shares. He said Pangilinan, as majority shareholder of Philex, can file a lawsuit against Ongpin and claim losses on behalf of the mining firm. But Osmeña said Pangilinan only has until Wednesday to file the recovery suit since the Securities Regulation Code (SRC) mandates that any claw back action should be done within two years from the date the profit was realized. "Manny Pangilinan has to act fast, or else Philex would virtually be waiving its right to get back the hundreds of millions of pesos in short-swing profits that Ongpin made," he said. If Pangilinan fails to go after Ongpin, the senator said the SRC states that minority stockholders can move to recover the short-swing profits. - KG/VVP, GMA News

Tags: mannypangilinan, robertoongpin, sergioosmeña