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By Maricel V.Cruz Reporter
Independent Rep. Carlos Padilla
of Nueva Vizcaya on Wednesday assailed
the planned takeover of a big steel company by two banks, which are
allegedly using the judiciary to ensure that majority control of the
Steel Corp. of the Philippines will be handed over to creditors
within the year.
Padilla, in a privileged speech,
accused the owners of Banco de Oro and its sister-bank, Equitable
PCIBank, of conspiring with some members of the judiciary to kick
out the owners of Steel Corp., which has been placed under
receivership by a Batangas court despite the company’s diligent
payments to its creditors. The two banks have already merged, with
Banco de Oro being the surviving company.
According to Padilla, the two
banks have been influencing both the Batangas lower court and the
Court of Appeals to deny Steel Corp. a much-needed rehabilitation,
which will make the company vulnerable to a takeover.
Steel Corp. is a pioneering
industry established in response to Republic Act 7103, or “The
Iron and Steel Industry Act.”
“The implications are ominous
for Philippine industry. It is by analogy, similar to breaking the
seal of confession that priests abide with. Banks access knowledge
about their debtors, conspire with judges to lower the value of
targeted companies, conspire with justices to shut out appeals, and
then proceed to take over. It is piracy,” Padilla said.
In his speech, Padilla also
hinted that a shadowy figure is involved in “operationalizing”
the conspiracy.
“Having been in positions of
power under two administrations, within which he was able to cause
the appointment of members of the bench, he now collects favors in
favor of some clients, cloaked in utmost secrecy,” Padilla pointed
out.
The former House minority leader
recalled that Steel Corp. was started during the term of
then-President Fidel Ramos. The company persevered despite the Asian
financial crisis, and is now the most modern integrated steel plant
in the country that exports to 12 countries high-quality cold-rolled
coils and steel sheets, including the world-renowned Galvalume 55.
Padilla pointed out that Steel
Corp. managed to pay the interest on its loans religiously, only
later to seek restructuring of principal payments through an Omnibus
Agreement with its creditor-banks in December 2002.
“Even as restructuring
negotiations were being conducted in good faith on the part of the
steel company, bad faith on the part of the now Banco de Oro-Equitable
PCIBank sneaked in,” he added.
Padilla pointed to the fact that
Banco de Oro, with undue haste, filed a petition to place Steel
Corp. under receivership before the Batangas Special Commercial
Court presided over by Judge Ma. Cecilia Austria.
“What Banco de Oro wanted was a
debt-to-equity conversion that would diminish the true value of
Steel Corp., such that its owners would end up with only 10 percent
of the corporation and 90 percent of the ownership would be in the
hands of the bank,” he said.
Padilla said Banco de Oro’s
actuation was contrary to the intent and purpose of the Interim
Rules of Procedure on Corporate Rehabilitation promulgated by the
Supreme Court and “contrary to all fair corporate practice, where
decent men know how to give and take, instead of being buccaneers
who just take and take.”
The lawmaker explained that based
on SGV’s audited financial statement for the year 2006, the total
asset value of Steel Corp. was placed at P13 billion, with a total
liability of P7.8 billion, leaving a net book value of P5.2 billion.
“SGV further estimated the
intangible assets of the company, such as its brand names, its
goodwill, and others, at P2.3-billion worth. Thus its total business
value should have been P7.5 billion, and yet the rehabilitation
court presided over by this Judge Austria arbitrarily and
whimsically devalued all these to just P1.6 billion,” Padilla
said.
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