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Friday, October 01, 2004
CA orders SSS to answer suit on execs' pay
By Benjamin B. Pulta
MANILA -- Five lawmakers and two private citizens are expected to file a suit Friday before the Supreme Court (SC) questioning a transaction entered into by the state-run pension fund Social Security System (SSS) two months ago.
Being questioned is the sale of the fund's stake in Equitable PCI Bank, as the transaction allegedly favored an investment firm linked to shopping mall magnate Henry Sy.
Lawyer Jose Bernas paid Thursday the P4,500 in docket fees required by the petition which the petitioners intend to file on Friday morning.
In a statement, Bernas's law firm said the petition will highlight that Banco De Oro Capital and Investment Corp. (BDO Capital) had not paid any consideration for the preferential right to match the highest bid for the approximately 29 percent outstanding capital stock of Equitable PCI owned by SSS.
One of the petitioners in the suit, Sen. Sergio R. Osmeņa III, was present at the SC Thursday and denounced the so-called "Swiss challenge" procedure for the contracts which he said could set a dangerous precedent for other government agencies who would want to favor specific firms.
Aside from Osmeņa, petitioners-to-be in the suit to be filed according to Bernas, are Senators Juan Flavier, Rodolfo Biazon, Alfredo Lim, Ana Consuelo "Jamby" Madrigal, along with Luis Sison and Patricia Sison.
The preferential rights given to BDO under the "Swiss challenge" covering the transaction were detailed in a two resolutions issued by the Social Security Commission last July and August, more particularly Resolutions 428-s2004 and 485-s2004
According to Bernas, the preferential treatment was also included in instructions to bidders, which the petitioners claimed, "manifestly and unduly favor BDO Capital and discourage participation by other bidders."
"Even to an uneducated person, the plan to sell the shares through 'Swiss challenge' procedure, stripped to its naked essence, is simply a scheme to sell the shares to BDO Capital without public auction," the statement said.
Among these was the provision where SSS is bound to automatically offer the shares to BDO Capital in case there are no bidders or no prospective bidder qualifies.
Likewise, all bidders, except BDO Capital, are required to acknowledge that title to the shares may be affected by at least two civil cases involving the shares.
All bidders, except BDO Capital, were likewise required to waive its right to sue SSS for any defect or irregularity in the sale or to seek relief from court.
The alleged "lopsided deal", the petitioners added, is also designed to compel the sale at a predetermined price of P43.50 a share, if the highest price exceeds the price that BDO is willing to pay.
The SSS has been directed by the Court of Appeals (CA) to answer another suit filed last week by a party-list group questioning the validity of a provision in the fund charter, which grants its management the prerogative to determine the pay and perks they themselves and their employees may get.
The appellate court ordered the SSS and the Department of Budget and Management (DBM) to comment in 10 days to the seven-page petition filed by Abakada-Guro which claimed that a relevant portion of Republic Act (RA) 8282 or the Social Security Act of 1997 "contravenes the Constitution."
The ruling, signed by the members of the CA's 12th Division, namely, Associate Justices Mario Guarina, Marina Buzon and Hakim Abdulwahid, said the CA is "not necessarily giving due course" to the petition filed against SSS.
It also said the group may in turn file a reply to the comment filed by SSS and DBM, within five days after receipt.
The provision being questioned by the group, which is formerly known as Social Justice Society (SJS), reportedly "delegates without standards the authority to fix the compensation of its (SSS) personnel and exempting the agency from RA 6758" or the Compensation and Position Act of 1998 which provided for the standardization of government employees' pay.
"Congress failed to provide for sufficient standards to limit the discretion of SSS in fixing compensation, allowances, other benefits," the petitioners said.
(October 1, 2004 issue)
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