GSIS chief Veloso placed under preventive suspension by Ombudsman

The Office of the Ombudsman has placed Government Service Insurance System (GSIS) President Jose Arnulfo “Wick” Veloso and six other officials under preventive suspension without pay for six months amid its probe on the P1.4 billion deal with Alternergy. 

In an Order dated July 11, the Ombudsman said it “found sufficient grounds” to place Veloso and six other GSIS officials under a six-month preventive suspension “considering that there is strong evidence showing their guilt” of possible grave misconduct, gross neglect of duty, and violation of reasonable office rules and regulations over the P1.4 billion stock purchase from AlterEnergy Holdings Corporation.

“The [Ombudsman’s Results of Investigation] expounded that the provisions [of the GSIS Investment Policy Guidelines] were contravened by the respondents because: the Perpetual Preferred Shares were not listed with the PSE (Philippine Stock Exchange) on the dates of the execution of the agreement and the payment of the subscription, the investment was non-compliant with the Minimum Market Capitalization and exceeded the Free Float Market Capitalization Cap,” the Ombudsman said.

Likewise, the Ombudsman said that the P1.4 billion worth of preferred shares were purchased by GSIS without the necessary endorsement from the Assets and Liabilities Committee (ALCO) and the Risk Oversight Committee (ROC) for the approval of the Board of Trustees (BOT).

“Their continued stay in office may prejudice the investigation of the case filed against them. [The suspension order is being issued] in order to preserve documents and evidence pertaining to this case which they have control and custody; and in order to avoid respondents’ commission of further malfeasance and/or misfeasance in office,” the Ombudsman said.

Sought for comment, Veloso told GMA News Online that GSIS acknowledges the Ombudsman’s inquiry into the pension fund’s Alternergy investment and "cooperating fully with the investigation."

“We welcome this opportunity to affirm the integrity of GSIS’s investment decisions and will provide further updates once the process concludes. As the investigation is ongoing, we will refrain from additional comments at this time,” Veloso said.

Meanwhile, the Ombudsman said the GSIS officials can appeal the suspension, although its immediate implementation cannot be interrupted.

Operational continuity

In a separate statement, the pension fund assured the public of uninterrupted service following the preventive suspension of its several officials by the Ombudsman.

“The GSIS Board has acted promptly to ensure business-as-usual across all services and core operations. All programs, member transactions, and benefits delivery remain fully operational and uninterrupted,” GSIS said. 

The pension fund said its Board designated Juliet Bautista, executive vice president for Support Services, as officer-in-charge (OIC).

“Bautista will temporarily assume the responsibilities of President and General Manager to provide steady leadership and assure continued service to all members and pensioners,” GSIS said.

It said that Bautista is a certified public accountant with more than 20 years of experience in auditing, accounting, and financial systems. 

She previously led GSIS’s Internal Audit Services Office, “where she was instrumental in achieving international service quality (ISO 9001) and data protection (ISO 27001) certifications.”

The GSIS OIC also holds a Master’s in Business Administration from the Ateneo de Manila University and a degree in Accountancy from the University of Santo Tomas.

 “The GSIS Board underscores that safeguarding the institution’s integrity and protecting members’ funds remain its highest priorities. Investments in governance reforms and strong internal controls are ongoing to further reinforce system resilience and transparency,” the pension fund said. —with reports from Ted Cordero/ VAL, GMA Integrated News