Monday, April 18, 2005

SEC - Caught by Surprise (Again!#?%*)



April 15 press release in the Philippine Star

By her own admission, SEC Chairman Fe Barin stated that Pacific Plan's filing for rehabilitation caught the Securities and Exchange Commission by surprise. We find her other pronouncements to be troubling:

a) based on the financial statements submitted to the SEC, there was no indication of a liquidity problem with Pacific Plans;
b) Pacific Plan's decision to file for rehabilitation was a step in the right direction and that Pacific Plan was candid enough to admit its problems???

This is a very sorry state of affairs. The correct measure of candidness is the submission of financial statements that can intelligently anticipate and discuss problems as well as corrective measures ahead of time. Submitting a request for a TRO in the proverbial dead of the night does not qualify for candidness nor transparency by any means.

Opposite to the apparently welcoming attitude of Chmn. Barin, we, the planholders, feel a sense of dread at what seems to be a premeditated and cold-blooded execution transgressions to hand both the planholders and the regulators a fait accompli. When times were good and the business profitable, we can safely assume that senior management and the shareholders paid themselves handsomely. Now that we are in bad times, the major shareholders and management expect the planholder to be left holding the bag.

We will have much to take up with the auditors of Pacific Plans. As the Enron case has shown, full accountability will be expected of the external auditors. The prudence of the investment policy and actions as approved by the seniors of Pacific Plans should have been part of proper disclosure as well as audit.

Prudently managed portfolios do not rot overnight!!! After all, that is how you define prudent management -- the ability to weather ups and downs of the marketplace gracefully. It is too fantastic a stretch of the imagination that Pacific Plans is asking of its planholders that its vaunted reputation for prudence blew up due to "unforeseen market conditions", all within the space of a year (i.e. the period from last fiscal year's filed financial statements to the present).

So we are left with many avenues for investigation:

a) Was the SEC remiss in its oversight duties and responsibilities?
b) Were erroneous, if not misleading, financial statements submitted to the regulator?
c) Did the external auditors exercise due care in reviewing the Pacific Plan's operations as well as the condition of their portfolio?
d) What is the quality of investment management policies at Pacific Plan?
e) What are the investment decisions that were undertaken over the past three years?
f) Competency and prudence of senior management given their failure to address "unforeseen market conditions".

The SEC has an obligation under law to deliver swift and comprehensive answers to these questions.





29 Comments:

At Monday, April 18, 2005 9:42:00 PM, Anonymous EasyRider said...

If Pacific Plan, Inc.is allowed to go scotfree and succeed in swindling its planholders through a scheme of corporate deceit and plunder, other pre-need companies may follow suit, and thus a domino effect would emerge. Where will that put the insurance business in this country? Likewise, having placed PPI on rehab, what credibility will be left with other insurance programs of GrepaLife? And what about the Yuchengco Group of companies, RCBC in particular?

 
At Monday, April 18, 2005 10:50:00 PM, Anonymous Andy & Marcia said...

You have to have some admiration for Enrique Sobrepena who has moved heaven and earth to meet commitments to CAP plan holders. Een if payments are delayed, CAP has been paying.

The Yuchengco Group has telegraphed it's intention not to honor it's commitments anymore.

That's RCBC and the Yuchengco Group of Companies for you.

 
At Tuesday, April 19, 2005 2:10:00 AM, Anonymous Anonymous said...

I agree with Andy and Marcia. At least the Sobrepenas seem to try their best in meeting the obligations to their planholders despite the fact that they are in a more difficult situation than the GREEDY YUCHENGCOS. And we have seen that the Sobrepenas were open to interviews. Unlike in PPI's case, all we see is this Atty. Tecson. Sorry but we're sick and tired of seeing her face. She has nothing new to say anyway.

WHY HASN'T THERE BEEN MUCH MEDIA COVERAGE ABOUT THIS CASE. In the evening news of both ABS-CBN and GMA, seems that there's news blackout even though their news crews could see the disenfranchised and angry "mob" at the PPI office daily. Not even one of their News and Current Affairs shows has featured this fiasco. Doesn't this news item deserve to be tackled by their shows like Dong Puno Live, Debate, MGB, Imbestigador, Assignment, Reporters' Notebook, Correspondents, Jessica Soho show, I-Witness and others.....BAKIT KAYA?????

 
At Tuesday, April 19, 2005 10:32:00 AM, Anonymous Malou said...

That's the end of the Yuchengco name. All those years of hardwork to preserve his integrity and his children bring his name down.

It was all hype, YGC and RCBC cannot be counted on.

Siguro naman RCBC can provide a facility for educational loans secured by Pacific Plans paper maturing 2010.

 
At Wednesday, April 20, 2005 9:22:00 AM, Anonymous Anonymous said...

big companies and the government are just the same! those in charged really do not serve the people but themselves. they help each other too. kaya wala nang pag-asang mamuhay sa pilipinas... our dream for our children's education is now gone and our hope for our children's chances of improving their quality of life also ended! maybe they really wanted to uneducate the people like what the spaniards did so they can take advantage of them even more! imagine with sky-rocketting tuition and fees, did the standard of education really improve??? we can shout and shout but will they listen??? people who don't believe in insurance policy and pension plans are now either laughing at or blaming us for our "wise" decision as what ppi stated in their numerous letters thanking us!!! That was ppi's selling point, their convincing power. so many times the words "assured" and "guarantee" were included in the contract... MANHID BA SILA o TALAGANG INDI MAKAINTINDI??? NO CONSCIENCE? Maybe they want to use up their money to buy a place in heaven!? is this the way how you give back to society the riches you have amassed? If you're a person who spent a lifetime to build your name, i guess you wouldn't just tarnish it just like that. if so, it surely must come from those close to you like helen dee??? The scheme na pabagobago and no word of honor must really come from a very shrewd woman!!!

 
At Wednesday, April 20, 2005 9:37:00 AM, Anonymous Anonymous said...

it doesn't matter who the brain of this inhumane scheme. what is important is that mr. integrity must act on what his company assured and guaranteed the planholders!!!!

 
At Wednesday, April 20, 2005 10:37:00 PM, Anonymous Anonymous said...

Why don't we all assign our open ended plans to RCBC? RCBC will pay us, and then PPI will,upon maturity of theirr Napocor bonds on 2010, pay RCBC. That way, we, planholders will not be left with an empty bag. Don't they say in the business papers that RCBC is so and so in assets, in net worth, etc? So now is the time to prove it!!!

 
At Wednesday, April 20, 2005 10:39:00 PM, Anonymous Anonymous said...

yes, i believe that mr. integrity should come out and act and act quick. i guess no one mentioned that mr. integrity just came out of the hospital. Got unconfirmed information that he went under the knife the week the news came out that PPI is under rehab and he doesnt know about the issue. its all the work of this shrewd woman helen dee. just hope that AY will be able to rectify everything and live up to his name and title as mr. integrity. still, we planholders should really unite and let our voices be heard. have already farmed out the news about our meeting on saturday and we should try to encourage more to join.

 
At Wednesday, April 20, 2005 10:40:00 PM, Anonymous Anonymous said...

You, PPI people, are making us look stupid. You are only giving us 7% return on our investments when you will be earning 11%. We should have bought Napocor bonds instead of putting our hard earned money on a scumbag of a company like yours!!!!

 
At Wednesday, April 20, 2005 11:20:00 PM, Anonymous Anonymous said...

The inability of government agencies like the SEC to monitor pre-need companies is indicative of the quality of the people in said agencies.
Anyone having had to deal with any government agency be it the SEC, BIR, POEA, LTO etc.. know that grease money is the only thing they know and understand.
Just wait till the SSS runs out of funds to pay for our retirement benefits in the next 10-15 years.

 
At Thursday, April 21, 2005 12:20:00 PM, Anonymous Anonymous said...

Fe Barin surprised?

Why?

The FS didn't show the financial condition of Pacific?

If so, what does this mean?

The FS was tampered?

The FS didn't reveal the right information?

Then, who is liable?

The auditing firm?

The key officers of Pacific?

Helen Dee?

Or Fe Barin pretended not to have seen?

Or she refused to see?

Didn't she know what Lifetime was up to?

Wasn't she suspicious of the timing?

Who is she working for?

The Filipino people who pays her salary?

Or the big businesses who can better protect her?

Isn't she there to protect the interest of the people, that is why there is such a regulatory body?

What's going on?

 
At Friday, April 22, 2005 9:01:00 AM, Anonymous Anonymous said...

Fe Barin was on Dong Puno's show lastnight and she certainly didn't sound like she was supporting Pacific Plans. Her position was for parents to unite and go to court. It seems Pacific Plans did one over SEC by going to court first. She was applauded by the panel of parents and children who were there.

 
At Friday, April 22, 2005 11:02:00 AM, Anonymous HAPLESS VICTIM said...

Does FE BARIN know how loooong it would take to ge redress from our courts? It would not have been necessary for us to go to court if SHE KNEW AND DID HER JOB!!!!

 
At Friday, April 22, 2005 11:04:00 AM, Blogger Sassafras said...

Hope someone can share the discussion that transpired on the Dong Puno Live show, di ko nalaman na meron pala. May replay kaya ito.

 
At Friday, April 22, 2005 11:05:00 AM, Anonymous Anonymous said...

By the way, who is the auditor of PACIFIC PLANS? Don't tell me its SGV again?! The SGV auditor of ENRON, VICTORIA'S MILLING, PILTEL fame, etc.?

Does anyone out there know?

 
At Friday, April 22, 2005 11:45:00 AM, Anonymous Anonymous said...

To sassafras and other planholders who missed Dong Puno Live Show last night, Apr. 21, go to http://now.abs-cbn.com/, then click "On Demand" link. Under "News & Current Affairs" there is a link to Dong Puno's show.

You have option to watch the show online or download it. Either way, you need DSL connection because the file is very large and watching it online on dialup will take forever.

 
At Friday, April 22, 2005 12:53:00 PM, Anonymous Anonymous said...

SORRY to sassafras and others but dont bother to download the show from ABS-CBN website! After an hour of trying to download Dong Puno Live, I found out it is accessible only to pay subscribers. Anyway, I hope someone can get the transcript of the show somehow (anybody with contacts inside ABS-CBN?)

 
At Friday, April 22, 2005 1:41:00 PM, Anonymous Anonymous said...

Isn't the auditor of Pacific Plans Joaquin Cunanan?

Re. last night's Dong Puno Live show focusing on the Pre-need industry, it had its highs and lows depending on what side of the fence you belong to.

Pacific Plans didn't have the guts to send any representative. The panelists were Fe Barin of the SEC, Sen. Mar Roxas, Joey Cuisia of Philam Plans and the president of the Pre-need association whose name I forgot.

There were other representatives of other firms like Loyola Life Plans and Philamlife Plans. Some even sounded like they were making a plug for their respective companies.

Barin struck me as being too indecisive and in the dark on certain matters.

Roxas appeared to be on the side of the plan holders though at times it would appear that he was grandstanding and trying to earn "pogi" points. Let's give him the benefit of the doubt.

The president of the pre-need industry was very defensive which is expected as he was representing the various pre-need firms.

Cuisia scored points with the planholders in the studio when he said that the plans were valid contracts and if the pre-need companies could not keep their end of the bargain, the owners of the pre-need firm should be liable.

Some of the plan holders were very emotional which was to be expected. One lady made her point in very short, concise and simple statements.

Let's just hope that we can keep the newsworthiness of this issue alive in the next few months. Otherwise, knowing the short memories of our government officials, it would just fade away.

 
At Saturday, April 23, 2005 1:03:00 PM, Anonymous Anonymous said...

I was caught by surprise at what happened to Pacific Plans. There was hardly any exposure concerning the history and story of this mess came about. I may be wrong but doesn't Pacific have an obligation to all the planholders who suscribrd with PPI? If they cannot finance the tuition fees of our children, isn't that tantamount to a BREACH OF CONTRACT?

 
At Saturday, April 23, 2005 1:21:00 PM, Anonymous Anonymous said...

Back in 1990, I paid my intallmnents religously and punctually. It is only fair that Pacific Plans rciprocate by meeting their obligations to all members who have painstaickinly paid their premiums over the years. They should be held accountable. Is a claas suit realistic?

 
At Saturday, April 23, 2005 7:51:00 PM, Anonymous Jerry said...

I think they (Pacific) should assign to all Planholders stocks and bonds that correspond to tuition fees for that year, every year until they can come up with the financial means to pay off the scholars. This way we have the option to sell these stocks and bonds, year to year, if case need be.

 
At Saturday, April 23, 2005 7:55:00 PM, Anonymous Anonymous said...

Pacific should just apply for a loan from RCBC to pay off Scholars Tuition yaerly till 2010, the year their Bonds in Napocor woiuld mature. It would be a cinch for them to be granted a loan since they also own RCBC. They should just pay 7% to RCBC.

 
At Sunday, April 24, 2005 11:38:00 PM, Anonymous Anonymous said...

Why not loan from RCBC to fulfill their obligations to all pacific plan holders!!!!! I'm sure they did make a loan from local and international banks to finance/expand their businesses.

 
At Monday, April 25, 2005 2:19:00 AM, Anonymous Anonymous said...

I agree. What is stopping PPI to loan from RCBC and use the NAPOCOR bonds to pay in 2010? At the same time, the Yuchengcos should infuse additional capital since their other companies have been earning in billions anyway.

Of course they would not want their billions to be depleted.

Just to remind them that they could not bring their billions when they go to HELL!

 
At Monday, April 25, 2005 2:25:00 AM, Anonymous Anonymous said...

External auditor of PPI is Punongbayan and Araullo.

 
At Wednesday, April 27, 2005 8:29:00 PM, Anonymous Anonymous said...

Why not PPI loan from State of Investment which is the official finacing company of the YGC Group?

 
At Friday, May 06, 2005 2:15:00 PM, Anonymous Anonymous said...

It appears Pacific Planholders are the more discriminating ones as shown in media and this coalition. I am just afraid this may lead to problems of other YGC Companies like RCBC and will then affect the banking industry and again it will now be a chain reaction from industry to industry then SEC to BSP then who knows what problems will be next.

 
At Saturday, October 08, 2005 5:24:00 AM, Blogger heropoo said...

Your blog is excellent - keep it up! Don't miss visiting this site about bad credit loan

 
At Friday, November 18, 2005 7:16:00 AM, Anonymous financial integrity said...

Thanks for the look see at your blog. For me principled financial integrity is the name of the game. So doing honorably and with gratitude allowed me to collect what I have assembled at http://www.rollingems.com. Have a good day.

 

Post a Comment

<< Home