The smartest investors … or the most valuable puppets?


Fourth of a Series

Part 1:The Indonesian billionaires behind the ‘MVP Group’

Part 2: Indonesian tycoon skirts Charter limits through corporate layers

Part 3: Closet billionaires . . . or corporate dummies?

I reported Monday the strangest thing about the Indonesian Salim-owned conglomerate in the Philippines, aka the “MVP Group,” after the initials of Manuel V. Pangilinan, the group’s top executive who many people had thought was its controlling stockholder: That is the fact that a firm, heretofore kept from public eye, Pacific Enterprise Management Holdings Inc. (PEMH), is the 60-40 partner of billionaire Anthoni Salim in a shell company, Enterprise Investment Holdings.

This firm is the first of several corporate layers that create the legal fiction that Salim’s investment vehicles in public utility firms – among them Philippine Long Distance Telephone Co., Meralco, Maynilad Water Services and several others under his holding company Metro Pacific Investment Corp. – are Philippine firms. (See “Closet billionaires or corporate dummies ” June 22, 2015).

This is despite the fact that through the layering scheme, Salim’s effective ownership in the investing firms increases to 78 to 92 percent in the companies that control public utilities such as PLDT and Meralco, as well the holding firm, Metro Pacific Investment Corp.

That of the Filipino firm PEMH, on the other hand, is reduced to 21.6 percent in the investing corporate vehicle in Metro Pacific Investments, and 13 percent and 8 percent, respectively, in the two shell companies that hold the PLDT shares.

What is surprising is that instead of getting other Filipino tycoons – such as, for instance, John Gokongwei, who had helped Salim in a Singapore deal and in disposing of Fort Bonifacio; or the Ayalas, with whom he recently partnered for multi-billion infrastructure projects – Salim chose as his partners, other than Pangilinan, third-tier executives from his conglomerate, who don’t seem to be capitalists at all. If they are real owners of those shares, that is.

Above, Anthoni Salim, who now controls strategic Philippine public utility firms such as PLDT and Meralco, with his late father Soedono, the Indonesian strongman Suharto’s biggest crony. Below, a rare photo of Anthoni’s biggest partners together, if their corporate reports are to be believed: left, Victorico Vargas, Manuel V. Pangilinan and Alfred Panlilio. Lower photo from a article that identified the two as Pangilinan’s “sports brain trusts.”

Above, Anthoni Salim, who now controls strategic Philippine public utility firms such as PLDT and Meralco, with his late father Soedono, the Indonesian strongman Suharto’s biggest crony. Below, a rare photo of Anthoni’s biggest partners together, if their corporate reports are to be believed: left, Victorico Vargas, Manuel V. Pangilinan and Alfred Panlilio. Lower photo from a article that identified the two as Pangilinan’s “sports brain trusts.”

Nearly as big as Pangilinan’s 29 percent holding in this firm are two equal stakes of 24.4 percent each held by Alfredo Panlilio, Meralco senior vice president for corporate communications, and one Victorico Vargas, president of Maynilad Water Services. Panlilio also happens to be president of the PEMH, which puts him in an awkward position, with his boss at Meralco technically being just his employee.

The minority investors in PEMH who have 11.1 percent each are Rene Bañez and Ma. Lourdes Rausa-Chan, ironically I would say, PLDT’s past and present chief governance officers.

Why them?

Why did Salim or Pangilinan choose these particular people as Filipino partners in a key corporate entity of the conglomerate’s ownership labyrinth?

Why not the group’s top executives since 1998, such as PLDT President Napoleon Nazareno, Ray Espinosa, the conglomerate’s legal brains in charge of Salim’s media empire and chair of the Philippine Star; Orlando Vea, who founded Smart, or even my old colleague, Smart PR Ramon Isberto, whose loyalty to the conglomerate borders on the religious.

Why not former Chief Justice Artemio Panganiban, who’s been a PLDT director ever since he retired from the High Court and gives the Salim-controlled firm a sheen of constitutional loyalty? Why not Foreign Affairs Secretary del Rosario, who had helped Pangilinan and Salim get into the Philippine business world in the 1980s, and who had even been First Pacific director for many years and resigned only when he was appointed to his current post?

I won’t be too surprised if it turns out Bañez is, indeed, a stockholder of PEMH. He was head of the Bureau of Internal Revenue in the administrations of both Fidel Ramos and Gloria Macapagal-Arroyo, and until 2013 had been in charge of PLDT’s compliance with government laws and regulations. Is he with PEMH for his vast government connections?

I don’t wonder, though, why Rausa-Chan is a stockholder of PEMH, if she really is, that is. Since 1998 when Salim acquired the firm, she has been PLDT’s corporate secretary. In the Philippines, that is one of the most powerful corporate positions given its private, direct knowledge of all of a company’s secrets.

However, I can’t figure out why Panlilio and this Vargas should be the biggest stockholders, after Pangilinan, of PEMH, if that is really true. I hope readers of this column can enlighten me on this matter.

Both are known to be the athletic type, and are Pangilinan’s representatives in the Philippine sports world. The conglomerate has the country’s biggest patron of sports, a very clever move that has boosted Pangilinan’s prestige. No other tycoon has been as involved as a patron of sports as Pangilinan has been.

Sports writers refer to Panlilio and Vargas as Pangilinan’s “sports brain trusts.” They are the top officials of the MVP Sports Foundation, the Samahang Basketbol ng Pilipinas, and the Philippine Basketball Association (PBA). Panlilio is also treasurer of the National Golf Association, while Vargas is president of the Amateur Boxing Association of the Philippines and a member of the Philippine Olympic Commission, as well as the International Basketball Federation.

I don’t see, though, how involvement in sports enterprises could be a criterion for Salim’s choice of partners for his conglomerate.

I had been hoping that Pangilinan and his colleagues would respond to my column on Monday, June 22, with a logical explanation as to why they aren’t really merely dummies of the Indonesian tycoon, and that they really own the shares in PEMH as reported in their filings with the Securities and Exchange Commission. If they, indeed, own the shares, they would be multi-billionaires and the country’s smartest investors ever.

Not a word, though, from them nor any of their representatives, especially from their corporate secretary, Alex Erlito Fider, who swore “under the penalty of perjury” that the General Information Sheet he submitted to the SEC, which lists the five as the firm’s stockholders, is “true and correct.”

Instead, a reader alerted me to the act that the filings of Salim’s Hong Kong-based First Pacific Co. Ltd. to regulatory bodies in the region and in the US report that its economic interest in PLDT totals 25.6 percent and in Metro Pacific Investments, 55.8 percent. Hong Kong regulatory bodies strictly require accurate reports of ownership of a listed firm as First Pacific Co. Ltd.

But such equity holdings are on the assumption that PEMH is owned, not by the five Filipino stockholders, but by First Pacific. In that case, it would mean the Filipinos are merely dummies.

If PEMH is what it claims to be, as owned by the five Filipinos, First Pacific would report its economic interests in PLDT to amount to only 23.4 percent (and not 25.6 percent), with the Filipino PEMH holding 2.2 percent.

In the case of MPIC, it would, instead, report that its equity interest was equivalent to 43.7 percent – not 55.8 percent – with the Filipino entity PEMH owning a 12.1 percent stake.

first-pacific20150624I’m sure PEMH stockholders can explain that they haven’t really violated that old Anti-Dummy Law of 1936 (amended by Presidential Decree No.715), the monetary penalties for which are certainly small, but involve up to 15 years of imprisonment.

I can’t wait to hear their explanation.

It would also be helpful, if they want to prove that they are the real stockholders of PEMH, for them and for the corporate secretary to show us copies of their receipt of billions of pesos in dividends from such firms as PLDT and Meralco, being the companies’ indirect investors who should be receiving their share of profits.

On the other hand, if they aren’t really the stockholders of PEMH, they would be people actually representing another entity, or under the control of another entity, which is the definition of a “puppet.”

Unless they can prove otherwise, they would be Salim’s MVPs, his Most Valuable Puppets.

Part 1: The Indonesian billionaires behind the ‘MVP Group’

Part 2: Indonesian tycoon skirts Charter limits through corporate layers

Part 3: Closet billionaires . . . or corporate dummies?
FB: Bobi Tiglao


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  1. Alvin_matters on

    Ohh God -_- … They’re not criminals, they do business like everyone else , but none of that matters now, I don’t see why you make a big deal out of it, what they do also benefited us… they get they’re share and the government gets theirs… though I have to admit I have learn something in your article.. about Vargas and Panlilio heading MVP foundation.. that was really nice to know.

    • Vinal_doesn'tmatter on

      The Anti-Dummy law is a criminal legislation. Hence, breaking it means one is a criminal regardless of how legitimate they look to you.

  2. Carter Pewterschmidt on

    There’s a saying that if you can’t achieve greatness on your own merits, achieve it by attacking someone prominent. Unpatriotic? Would Mr. Tiglao like to say that to MVP’s face? Well, at least thanks to Mr. Tiglao, we now know who to thank for helping the MVP Sports Foundation bring home the gold. Yumaman ang mga tauhan ni MVP dahil sa kanilang work etchic. Pumapasok sila sa trabaho minsan right after Mass. Mr. Tiglao just comes across as petty and vindictive by digging up an old issue resolved by the SEC long ago. Or does Mr. Suharto have a beef against Indonesians. Boss, kung may Suharto sila, meron din sila Jokowi. Baka masgusto mo kung mga Americano or European sila? Sir, if your nationalism will indeed give people jobs and put food on their tables like MVP does, then I would salute you.

  3. Ynigo Malabanan on

    This article is xenophobic indeed as one commented below said. Also bigoted. So what if Indonesians are investors in the Philippines because they are Indonesians and not Americans? Links with the strongman Suharto? Completely irrelevant.

  4. victor m. hernandez on

    All the discussion on this issue has pros and cons for flor the economy, specifically for employment and income. Whoever are the investors or owners, whether foreigner or Filipino should be viewed in this perspective. Of course there is a constitutional guide or rule on such ownership. Putting that aside for the moment, the business that they are in are legal and legitimate. The constitutional issue on this matter is an issue that is arguably and perceptively a hindrance to the development many industries and economic sectors. Apparently the so-called MVP group of companies are competently managed, generating much employment and contribute to the creation of new enterprises and helping them to be sustainable. Arguably, the Filipino businessmen do not have the sufficient capital to develop many industries and economic sectors. Even government is inadequate in its finances,and promotes private capital to invest in many big ticket project, thus the PPP. The Speaker of the House, Speaker Belmonte proposed the amend the economic policies in the Constitution to allow more foreign investors and greater ownership of companies that are presently not allowed by the current Constitution. This is the crux of the matter. Without enough Filipinos investing in needed projects to contribute to the faster development of the country, the influx of foreign investors can do their share of development. We cannot keep on taxing or creating new taxes to exact from the citizens in order to support the development of big ticket projects. Foreign investments can help much more in hastening the development of the economy, generate more employment, and income for the people.
    So, this current Constitutional limitation on investments and ownership of companies is analogous to the pharisaical practice of forbiding doing good works including healing the sick on the Sabbath. The Philippines is a wealthy country with many natural resources waiting to be tapped and developed, but given the restrictions (on foreign investment and ownership) in the current Constitution, we can only say “mamuti na lang ang mga mata mo, walang mangyayaring paguunlad sa economiya ng bansa, at magpapatruloy na magpapaalila ang maraming Filipino sa ibang bansa.Kung meron man usad pagong ang pagunlad”.

  5. Rosario Magdalena on

    are they corrupt? do they deserve this long discussion? be reminded that their companies are professionally managed companies here in our country.

  6. Xenophobic article. Change our constitution instead, opem it up to foreigners so that we can compete with Malaysia, Indonesia, thailand and now even communist vietnam that has just raced past us in terms of attrcating foreign investments.

  7. Migs Doromal on

    Banez is part of the SGV mafia. Vargas is also the “go to” guy when it comes M&A for MVP group of companies. As for Al, he’s got no brains and is there for the sheer pleasure he gives to MVP’s eyes.

  8. Many hail MVP as a business genius and would even want him to be president of this country. Never mind if he is managing resources not our own and enriching his foreign bosses in the process at the expense of our own people. How some of these corporations have treated consumers all this years enraged even the most docile among them. Never mind if MVP is managing what is believed to be funds stolen from Indonesian coffers during Suharto’s time and laundered in the Philippines through his own efforts. MVP is far from being a model businessman. He is a crook of another kind but no different from the members of Congress and the officials of the Executive. And largely no different from the elite and the oligarchs who rob us dry. Belmonte is only too happy to spearhead in amending the Constitution to legitimize what MVP did and is doing. A P3Biliion Star is all it took to further the robbery that they wish to continuously perpetrate against our people.

  9. Felimon A. Soria on

    If there is a probable violation of law Mr. Tiglao, don’t you think the SEC or the DOJ are looking into it by now?