Before the Supreme Court came into the picture, the issue of corporate governance and transparency on the conduct of the business affairs of listed Philippine Racing Club Inc. (PRCI) has been the focal point of the local business community. After all, the corporate battle brewing at the PRCI between the Filipino shareholders and a Malaysian-backed faction of the racing firm’s board was seen as the showcase of how far the country has gone in corporate-sector reforms.

The issue that hounds the PRCI boils down to whether the racing club could transfer its P12-billion assets (Santa Ana racetrack) to JTH Davies, a P25-million shell of a company.  This corporate battle pits prominent Filipino shareholders in the club, like the Puyats, against Malaysian shareholders and a Filipino group led by Santiago Cua Sr. The Puyats and their Filipino allies have complained that they were not properly informed about the deal that would swap the title of the racetrack with shares of stock in JTH Davies. The Filipino shareholders also complained that the swap was lopsided.

In the course of their uphill battle against the Cua group, the Filipino shareholders managed to obtain an injunction from the Court of Appeals (CA). The injunction forbade the Cua group from consummating the serving of the P12-billion racetrack on a silver platter to the P25-million JTH Davies shell until the appropriate court has ruled on the merits of the case. The business community later hailed the legal victories of the Filipino group as a triumph for “transparency” in corporate governance.

Transparency appears to have been the focal point of the row between the Puyat-led Filipino shareholders and the Malaysian-backed Cua group. The Puyats, et al., have reportedly sought to examine the documents pertaining to the purchase of JTH Davies to which the club’s most important business asset is to be transferred. So when the CA slapped an injunction against the Cua group, the local business community cheered. Not that the business sector disliked Cua Sr., who is known as Cua Sing Huan in the Chinese-Filipino community. It is just that there is a growing disdain for the cloak-and-dagger type of corporate maneuvers in the country today.

Then came the temporary restraining order (TRO) by the Supreme Court. The TRO was slapped against the CA injunction, meaning the Malaysian-backed Cua group may now proceed with the questioned the P12-billion racetrack-asset swap with that of the P25-million JTH Davies corporate shell. The question hounding the corporate sector is whether or not the Supreme Court TRO on the CA injunction has effectively reversed the cause of transparency in corporate governance. We believe there is too much hysteria in that kind of thinking.

No, the Supreme Court TRO on the CA injunction against the Cua group is not a setback to corporate-sector reforms. The TRO is not a ruling on the merits of the arguments of either side. It was merely a legal relief that the Cua group sought from the High Court and got. It is understandable that the business sector would go on mild panic over the Supreme Court TRO. We cannot blame local businessmen for their anxiety over the association of Cua with the crisis sparked by the Westmont Investment Corp. financial debacle. But these should not lead to a conclusion that the judiciary no longer supports corporate-sector reforms. The merits of the case are yet to unravel.

Lacson on Enrile tirade

The reminder of Sen. Panfilo Lacson on what he termed as lack of parliamentary courtesy when Sen.Juan Ponce Enrile dressed down Joint Foreign Chambers of Commerce of the Philippines spokesperson Hubert D’Aboville at the Senate energy hearing on Friday may not be the last admonition that would come out of that sordid episode. Postings on YouTube from “Worried Pinoy” show the grilling that D’Aboville received. Pretty soon, that public display of outrage on a resource person the Senate invited would go back and forth in cyberspace and in other e-groups, as well.

D’Aboville was accompanied in that energy hearing by Henry Schumacher of the European Chamber of Commerce of the Philippines, and he, too, heard the fulminations of Senator Enrile. We remember Schumacher more than three decades ago, when we were still new in the business beat, and how he has made considerable efforts of marketing the Philippines as an investment site. We understand that Schumacher accounts for inducing into the country a sizeable chunk of foreign direct investments and should have not been on the receiving end of what Senator Lacson calls as “bullying, cutting and yelling.”

From the point of view of Senator Lacson, the country’s attempt to woo foreign investors, for which sizeable budgets have been spent, could receive a backlash in the face of public hearings such as that of Friday’s. In that hearing, D’Aboville was not able to read a prepared statement that could possibly elucidate on Senator Enrile’s beef about the supposed bypass of the Senate when the business group wrote directly to President Arroyo on the matter of the amendments to the Epira.

The business group, which accounts for a fourth of the power consumption from the Manila Electric Co. in Luzon, should have been allowed to ventilate its side. The concern of the members, after all, reflect that of the foreign businesses that invested in the country; their voices resonate with the collective wisdom of the millions of dollars that found their way into uplifting the poor, employing workers or otherwise contributing millions in taxes for the public good.

How the public lashing, aired live on cable television, could directly affect the entry of foreign investments into the country is yet to unfold. But foreign investments, when they come in, supplant the need for foreign borrowings for the country, which, as of the last report, is raring to float debt instruments of about a $1 billion again. But lost in the din of the Enrile tirade is a simple way by which D’Aboville painted a gaping disparity between the investments that went to Vietnam and the Philippines. Last year he said Vietnam got $15 billion while the Philippines got $2.5 billion. Now that is a yawning chasm that is very difficult to bridge. 

E-mail: hugagni@yahoo.com

The world’s largest producer of petroleum would be the last country one would expect to be troubled by skyrocketing fuel prices. At a time when 60 percent of what the rest of humanity pays for gasoline, diesel, kerosene and other oil byproducts goes to its coffers, Saudi Arabia, along with other oil producers, should be the least concerned—or should it?

Just last month, a Los Angeles Times story by Bruce Wallace somewhat lent perspective on what can be expected from the Arroyo administration in the months to come:

Faced with never-ending fuel-price increases beyond his control, Angelo Reyes, AFP chief of staff prior to being appointed secretary of defense, then interior, then environment, and then energy, solved the problem by ordering oil-and-gas dealers not to talk about price increases.

The Way Forward: A time for leaders

The grave challenges now facing the nation and the world make plain that we need strong leadership for our country today: not popular, movie star-like leadership that transforms citizens into fans; but gritty, tough-minded and effective leadership that can solve problems and meet goals and objectives.

Market Files: Racing-club issue

Before the Supreme Court came into the picture, the issue of corporate governance and transparency on the conduct of the business affairs of listed Philippine Racing Club Inc. (PRCI) has been the focal point of the local business community.

William Pesek: Obamamania alive and well on Indonesian beach

Detta is all of 11 years old, and the precocious Indonesian youth is an avid Barack Obama fan. She’s wearing the “Go Obama”
T-shirt to prove it.

Food Summit: Some progress, but more needs to be done

The final declaration of the Conference on World Food Security: Challenges of Climate Change and Bioenergy strongly affirms the need for investing in agriculture, a very positive development.