Planholders’ group bucks PPI sale
Written by Honey Madrilejos-Reyes / Reporter
Jan. 26, 2009
THE Parents Enabling Parents Coalition (PEP), whose members purchased open-ended traditional education plans, is lining up a number of cases against the Yuchengco group as it expressed dismay over the sale of troubled pre-need firm Pacific Plans Inc. (PPI).
PEP president Philip Piccio said on Monday they will file a case for syndicated estafa for the sale of PPI and will petition the Bangko Sentral ng Pilipinas against Rizal Commercial Banking Corp. (RCBC) for allegedly mismanaging PPI’s trust funds. PPI and RCBC are controlled by the Yuchengco group.
Piccio said both complaints will be filed this week.
For its part, the Yuchengco group confident that it will be vindicated once the facts are presented.
“A similar complaint was filed with and resolved by the BSP years ago. We believe that a similar filing will not prosper,” it said in a statement.
It is common knowledge that the present financial meltdown has battered trust funds here and abroad. An accusation of mismanagement of PPI’s trust funds, therefore, has no basis whatsoever, especially because the funds are intact but are earning less than before the present global crisis, the Yuchengco group explained.
On the alleged syndicated estafa, the Yuchengco group said the case will not prosper because the requisite elements of fraud and damage are absent when PPI was sold.
For one, it pointed out, there is no legal restriction to the sale of a company undergoing rehabilitation.
“The accusation that the sale was equivalent to the former owner running away from its obligations is empty since PPI and its new owner are committed to pay the plan holders,” it added.
The Yuchengco statement pointed out that the sale of PPI to businessman Noel Oñate did not result in any diminution in the corporate or trust assets of PPI, which are intact at P12.5 billion, and will not affect the court-approved rehabilitation plan with respect to the planholders.
Oñate’s Abundance Providers and Investments Corp. (APIC) last week bought the entire stake of GPL Holdings Inc. in PPI for P250 million under a share purchase deal.
The new management, in its filing with the Securities and Exchange Commission, said that after the acquisition, PPI will now be known as Abundance Providers and Entrepreneurs Corp. Once the new board assumes, it assured shareholders and planholders that it will continue to implement the rehabilitation plan.
APIC also said it is studying the possibility of coming out with new education and pension plans, which will take into account all-weather hurdle rates.
PPI started having problems in 2002, when it ceased paying claims after it encountered liquidity problems as a result of its open-ended plans, which did not take into account inflationary pressures.
The pre-need company later sought the court’s protection and filed for corporate rehabilitation.
Under its approved rehabilitation plan, planholders are given the option to replace their open-ended plans with fixed-value plans, which can be encashed in July 2010, when the government bonds in PPI’s trust funds mature.
No comments yet.