Preneed plan holders spoil Yuchengco bid
The Manila Times (through Yehey.com)
Oct. 7, 2008
Planholders of Pacific Plan Inc. are raising their voices against any moves by the Yuchengco Group of Companies to acquire Philippine-American Life and General Insurance Co. (Philamlife), one of the international units to be sold by troubled American International Group (AIG).
Pacific Plan, a preneed company run by the Yuchengco group, is undergoing voluntary corporate rehabilitation, citing “liquidity problems,” which its planholders have contested.
Philip Piccio, the president of Parents Enabling Parents (PEP) Coalition, told The Manila Times on Monday that his group composed of Pacific Plan planholders cannot stop anybody from buying Philamlife out but “they cannot stop us from harping about the issue.”
Addressing the Yuchengco Group of Companies, Piccio said: “You say you did not have the money to pay us, saying that you will not be liquid enough to pay us until 2010 because the money is locked in Napocor [National Power Corp.] dollar-denominated papers. Here you are offering to buy Philamlife? That is contradictory to your reasons for not paying out plans. Suddenly, you have millions to buy Philamlife.”
Victoria Gomez, another PEP Coalition officer, also told The Times that the group was “very surprised” at the news that the Yuchengcos are bidding for the local AIG unit.
“It all boils down to corporate responsibility. You have to pay first your debts before [making a bid]. The Yuchengcos had the gall to make a bid for Philamlife,” she said.
Piccio, however, cleared that the PEP Coalition believes that Philamlife has “no problem,” and that it was only being sold by its beleaguered parent to help unload some of its obligations.
“But our message to [Jose] Cuisia [Jr.] and his group is that they must conduct due diligence [carefully] because he is [considered] the father of the thousands of insurance and planholders of Philamlife,” he said.
Cuisia is the president of Philamlife.
During a briefing Monday, the Philamlife president said the management would screen the 10 bidders for the company and will only shortlist “reputable” and “financially stable” firms.
Piccio, however, said being “reputable” is relative.
“What are their standards of [being] ‘reputable?’ Remember, insurance is about trust. And if you fail to remit pension or whatever, the trust is destroyed,” he pointed out.
But Cuisia’s statement on qualifications a buyer must have, Piccio said, gives the coalition “a glimmer of hope” that Philamlife will not commit the mistake of choosing a buyer with an allegedly soiled reputation like the Yuchengco group.
“Mr. Cuisia is intelligent enough not to commit that mistake. It would be damaging for Philamlife,” Gomez said.
The Manila Times tried to get the group’s side on the matter but a source within the group who asked not to be named declined to comment until they have a clearer picture of how things will pan out.
The source said the PEP Coalition’s reaction is to be expected but the Yuchengco Group of Companies is “not in a position to comment on that at this point.”
Gomez said that the coalition would continue to make noise, to make the public and Philamlife aware of its case against Pacific Plan. “It has been three years, we still have a pending case with the Supreme Court.”
Gomez added that the group’s fight still continues as they plan to file another complaint with the Bangko Sentral ng Pilipinas against the trust officers of Rizal Commercial Banking Corp. (RCBC), another
Yuchengco company, and other partners administering Pacific Plan’s trust fund.
She added that they have “more damaging evidence” against the preneed firm and that the trust officers “must be liable.”
In August last year, the Court of Appeals overturned a lower court ruling that denied a group of Pacific Plan policy holders a say in rehabilitating the company.
With this decision, the appellate court ordered the Makati Regional Trial Court to let the plan holders led by the PEP Coalition present evidence in the case involving the rehabilitation of Pacific Plan.
Early last year, the Bangko Sentral said it would penalize the Yuchengco-controlled RCBC for “lack of prudence” in managing the Pacific Plan trust.
On August 26, 2005, the coalition filed with the Bangko Sentral a complaint against RCBC on the grounds that the bank violated Section 80 of the General Banking Act of 2000 and claimed that RCBC did not have adequate safeguard or compliance with interlocking relationship between trustee and trustor.
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