Sunday, May 22, 2005

Reviewer 9 - YGC Financial Alchemy - Turning Gold into Lead


There has been great coverage of the scathing and damning report issued by the Securities and Exchange Commission last week. With the report out, we thought it might be useful to provide illustrations so that the readers can appreciate the mutilation that PPI has undergone. To paraphrase the SEC report, there really is no need for rehabilitation as PPI.

From One Fund Into Two Posted by Hello
At the risk of being repetitive...CALLING the CENTRAL BANK... What were the trust managers thinking when they agreed with PPI and stuffed the traditional plans pool with Napocor Bonds? They had already declared to the SEC that they were going to put liquid instruments and / or cash to backstop traditional plans. (RECALL THE APRIL 22 DONG PUNO show where Mr. Jose Cuisia stated that his company's policy was to ensure that the majority of their assets were government securities and cash -- sorry NAPOCOR bonds don't cut it).

GPL Black Hole Posted by Hello

GPL Holdings is the big black hole and has sucked up all the value created by the original PPI. We also need to point out that the original PPI was a crown jewel subsidiary of Grepalife. In turn Grepalife is owned by House of Investments, a publicly listed company.


Are Grepalife minority shareholders aware of the mutilation and measly monetary consideration that they got in exchange for the engineered series of sales involving PPI and the subsequent evolution into Lifetime, GPL Holdings, and Exemplar.


Mr. Peter Favila should mount a major investigation. The SEC report is extremely troubling and raises serious corporate integrity and governance. The trust activities of a listed bank (one of the PSE's clearing banks, we believe) raises questions as well as the potential lack of proper valuation regarding related party dealings between or among the investee companies of HI.

We know it is ticklish to ask good friends or relatives at YGC all of these tough questions. However, to quote High Noon, "a man's got do what a man's got to do".


At Sunday, May 22, 2005 10:58:00 PM, Anonymous Bail-out? said...

Is it possible that the reason PPI (1) mutilated its own company and (2) invested in so many junk Napocor bonds (even to the extent of borrowing money to buy more), is that they wanted the government to bail them out?
A report by ABS CBN says that Dave Diwa of the CARE PRENEED organization "likened the situation of pre-need firms to so-called independent power producers (IPPs), whose earnings are guaranteed by the government. He also asked Congress to aid the pre-need industry, which he described as a P175-billion 'government-regulated' sector.
Diwa said pre-need firms such as PPI and College Assurance Plan (CAP) hold state investment instruments such as MRT and National Power Corp. bonds, and partly the reason why these firms are in financial trouble."
Has anyone heard of Dave Diwa and the CARE PRENEED organization? Should the PEP coalition go along with their demand?

At Monday, May 23, 2005 1:36:00 AM, Anonymous Anonymous said...

Here is the latest from Boo Chanco.

Sneaky Tactic

Now, everything is coming home to roost. As I told Helen Yuchengco Dee, their big problem is that they allowed their lawyers to call the shots in this crisis of their lifetime. I told her that it was pretty sneaky of them of try that gambit of creating another company and subjecting the original Pacific Plans company to court-ordered rehabilitation.

I read the letter they sent to Pacific Plans subscribers and if that letter was addressed to me, I would naturally be enraged. One of my friends showed me the letter he got and the letter said that unless my friend responds in so many days, it would be assumed that he has agreed to be paid many years down the road and only at seven percent interest. That’s extremely sneaky legal ruthlessness, for which the Yuchengco family will end up paying dearly.

As it happens, the Securities and Exchange Commission (SEC) has accused the Yuchengco company of lying. In its 68-page comment on PPI’s petition for rehabilitation, the SEC said PPI’s actions were done in bad faith. Published reports say the SEC told reporters the commission does not believe the pre-need firm’s claims of liquidity problems.

It is also not enough for the Pacific Plans spokesperson to claim that the SEC is guilty of double standards because they even previously proposed such a move to CAP. Assuming that assertion is true, SEC probably realized they made a mistake with CAP and they are correcting it with Pacific Plans.

SEC’s negative reaction to the Yuchengco company’s plea before a Makati RTC sala is understandable. PPI made SEC believe from the start that it was a financially strong company. "They took us for a ride. They made such a good job of disguising their intentions," a SEC spokesman reportedly said.

In any case, SEC took the position I had always maintained that the Yuchengco company "should comply with its contract with the plan holders," and I mean not the fine print but the bold promise of paying the cost of tuition whatever it might be at time of need.

The SEC spokesman, according to reports, gave a pretty serious accusation against the Yuchengco-owned Pacific Plans Inc. He said the company even gave different figures regarding its trust fund in the audited financial statements it submitted to the Bureau of Internal Revenue (BIR) and SEC. In its statement to the BIR the company listed its trust fund investment as P6.34 billion. It its statement to the SEC it listed the same investment as P8.31 billion.

I think what galls SEC is the sneaky legal maneuver of Pacific Plan lawyers to tie the hands of SEC with the filing of the rehab case before the Makati RTC. "The hasty recourse to this court appears to be a ploy on the part of Pacific Plans to elude SEC intervention and enable it to force its swap offer to the planholders in the guise of a rehabilitation proceeding," SEC said.

If this is the way the Yuchengcos are going to handle this case, Helen should take the advice I gave her: Quickly sell their holdings at RCBC, Grepalife and Malayan while they still have value. They cannot continue being in the business of providing financial services with this big blotch on their reputation

At Monday, May 23, 2005 11:30:00 AM, Anonymous Anonymous said...

I've heard an interview with Mr. Piccio (you're doing great...hope your courage and dedication won't prayers are with you) in an AM radio station that large scale syndicated estafa (or something like that) will be charged against PPI officers.

With this latest post, I am more convinced that economic sabotage should be filed against these people as well. Not only are they swindling planholders, they are also black mailing the government, and worst, they're destroying an industry! Can someone enlighten me what the grounds are for economic sabotage?!! As days pass by, the viciousness and ruthlessness of these people are becoming more and more apparent.

AY should also file charges against the very same people (incl his daughter) who should have worked hard to maintain his reputation, or whatever is left of it.


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