Two raging controversies deserve the attention of Congress. One is that of the Philippine Racing Club Inc. (PRCI) involving a “mystery billionaire,” and the other of the Social Security System (SSS) now under the helm of Romulo Neri, former director general of the National Economic and Development Authority (Neda).

As for PRCI, there are still occasional gasps of disbelief and awe about an alleged “mystery billionaire” said to be backed up by a Malaysian-backed faction of the board of PRCI, and whose identity was not disclosed to prevent political aspirants in the forthcoming elections from milking him dry from solicitations for campaign contributions, or so they say.

The issue was being treated with more seriousness and sobriety last week. The focus of conversations was the question of whether further legislative support was needed to push reforms in the corporate sector. A possible probe has also been brought up in a bid to examine the long-term consequences of the “mystery-billionaire” scheme to the credibility and integrity of the corporate sector from the viewpoint of local and foreign investors.

Several questions appear to be foremost in our lawmakers’ minds.

First, what is the principle—or motive—behind the move by the Malaysian-backed faction to purchase an erstwhile moribund firm named JTH Davies for an amount which its Filipino shareholders say is exorbitant: close to half a billion pesos for a shell company with no business asset and with a worth that was barely P25 million?

Second, what is the principle—or motive—behind its move to dispose a huge chunk of its allegedly overpriced JTH Davies shares at much reduced fire-sale prices just barely a month after?

Third, what is behind the move by the same faction not to disclose the identity of the beneficiary of the bargain sale?

Fourth, what is the principle—or motive—behind its move to transfer the ownership of the P12-billion Santa Ana racetrack to JTH Davies after that unidentified bargain-sale buyer acquired 30 percent of JTH Davies?

The prospective goal, it seems, is to make sure that this high-profile controversy does not shoo away investors. It appears that our lawmakers are afraid of the possible perception that the country’s corporate sector—and publicly listed companies, in particular—is still run by cloak-and-dagger-type operators.

The fear is that the alleged plan to redevelop the Santa Ana racetrack may have already been jeopardized by the controversy regarding the scheme.

Maybe Congress would want to protect other future major real-estate developments from the fallout of the “mystery-billionaire” scheme.

Once the probe materializes, the lineup of business personalities who may be invited would definitely be interesting.

Businessman-sportsman Aristeo “Putch” Puyat is expected to lead the group of Filipino shareholders of PRCI who raised a howl against the scheme of the Malaysian-backed faction. His presence and testimony would definitely carry a lot of weight.

The Malaysian-backed faction would probably be those who are identified with Westmont Investment Corp., Santiago Cua Sr., a.k.a. Cua Sing Huan, and his sons Santiago Cua Jr. and Solomon Cua.

It would be interesting if Congress could haul in the controversial Asian businessman Datuk Surin Upatkoon who sits on the PRCI board on behalf of the Kuala Lumpur-based Magnum Holdings Berhad.

Upatkoon is still facing charges in Bangkok over allegations that the firm Kularb Kaew, which he owns, served as a front for the Singaporean business giant Temasek Holdings in the latter’s bid to control Thailand’s biggest telecoms firm Shin Corp.

The similarities between the possible roles of Kularb Kaew and JTH Davies are interesting. And it appears there is much concern over the possible role of Upatkoon in drawing up the elaborate scheme that led to the creation of the “mystery billionaire.”

But at the end of the day, it is the small Filipino investors that Congress would want to protect. They would want to find out whether the small investors lose out in schemes such as this.

Congress, however, may not be able to touch the issue on whether the Supreme Court was deliberately used to consummate the swap deal between PRCI and JTH Davies that led to the creation of the “mystery billionaire.”

The view is that a temporary restraining order (TRO) issued by Supreme Court Associate Justice Minita Chico-Nazario in favor of the Upatkoon-Cua faction paved the way for the completion of the swap scheme.

That development may have unfairly created the impression that the Supreme Court sided with the Malaysian giant in this row, much to the detriment of the Puyat-led group of Filipino investors.

Unfair. Just as unfair, perhaps, as the scheme that created a “mystery billionaire.”

Tinkering with SSS funds

Why fix it if it ain’t broke?

Now here comes the announcement of President Arroyo that she had replaced SSS chief Corazon de la Paz to pave the way for the appointment of Romulo Neri of the NBN-ZTE controversy.

Senate Minority Leader Aquilino Pimentel Jr. suggested that if it found out in the future that SSS money was being misspent, for electioneering, for instance, under the leadership of Neri, SSS members could go to court.

Why de la Paz had to be replaced by anybody is a prerogative of the President, but it may not look good in the eyes of many because her new SSS chief, in the person of Neri, could not be the most likeable person to run a pension fund owing to his refusal to give light to the price-fixing controversy before a Senate hearing.

Neri said his credentials would prove he is the right person to replace de la Paz, except for the fact that he refuses to acknowledge he has been tainted and his credibility assailed, even by many lawmakers.

Is it possible that the President may also be thinking of retiring the incumbent chief of the Government Service Insurance System (GSIS), Winston Garcia, following the controversies he had been involved in from way back when?

The SSS is in a much more enviable position than the GSIS, but the President nonetheless never had second thoughts about replacing de la Paz and in quick succession appointing Neri both as the new SSS chief and resurrected member of her Cabinet.

Before leaving, de la Paz told SSS members to be “vigilant” and “to make sure that the funds of the SSS would be used properly.” No, de la Paz, as a real lady, did not make any hint as to where the funds under Neri are headed for.

Observers say de la Paz does not deserve to be treated unkindly after having worked so hard to restore the financial viability of the SSS.

“Anybody but Neri” could be the next battle cry of the vigilant members of the SSS.

It is hard to believe that someone who has overturned the financial mess of the ailing SSS into a healthy and prosperous agency of the government would be given an unceremonious exit.

There were also talks about de la Paz refusing to take part in the failed bid of the GSIS to take over the Manila Electric Co. (Meralco), but she is not talking. In due time, perhaps, but not now.

De la Paz had always maintained, it was said, that the SSS did not need to buy more Meralco shares, whose share prices had been falling as a result of the takeover controversy.

Moreover, she insisted that the SSS is not in the business running another corporation. At the height of the Winston Garcia-Lopez war, Meralco shares fell to P42 from P82 three months ago. 

E-mail: raulbvalino@yahoo.com.ph

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Two raging controversies deserve the attention of Congress. One is that of the Philippine Racing Club Inc. (PRCI) involving a “mystery billionaire,” and the other of the Social Security System (SSS) now under the helm of Romulo Neri, former director general of the National Economic and Development Authority (Neda).