Pryce handing out gas, drugs instead of cash
Manila Standard Today
Feb. 11, 2009
By Fel V. Maragay
FOUR more pre-need companies are having a hard time paying their customers, and one of them is on the verge of declaring insolvency, the leader of an alliance of educational plan holders said yesterday.
Testifying before the Senate, Philip Piccio, president of the Parents Enabling Parents Coalition, challenged the Securities and Exchange Commission to advise the public about the real financial condition of troubled pre-need companies and to order them to stop selling new plans.
“It is the job of the regulator to find out who is okay,” Piccio told Standard Today after yester-day’s hearing.
He declined to identify the four financially strapped pre-need firms, but SEC Chairman Fe Barin said Pryce Plans was among those having liquidity problems.
“Based on the complaints that are being brought to us by plan holders, these four have been identified and one of them was mentioned by Chairman Barin,” Piccio said.
He said he did not know when these companies would close shop, but added: “There is already smoke.”
Congress is investigating the pre-need industry following the collapse of the Legacy Group’s pre-need group and 13 affiliated rural banks.
A House plan to summon judges and justices to shed light on the case drew a warning from the Supreme Court, which said doing so would set a bad precedent.
The House panel wanted a Manila trial court judge and two justices of the Court of Appeals to explain why they granted the Legacy Group a temporary restraining order against government efforts to close it down.
“It could create a very bad precedent among two co-equal branches of government,” said Supreme Court spokesman Jose Midas Marquez.
Members of the central bank and its policy-making Monetary Board were also concerned about a similar invitation to testify.
During a hearing at the Senate yesterday, Senator Mar Roxas prodded the SEC to quickly order the attachment of the assets of Celso de los Angeles, head of the Legacy Group, which had filed a notice of dissolution of its pre-need business in December for insolvency.
Roxas said plan holders, depositors, investors and creditors of the pre-need firm, banks and other business enterprises under the group could also file a collective petition with the courts for the attachment of De los Angeles’ properties to pay for company obligations to them.
Roxas, chairman of the committee on trade and commerce, said he intended to invite Vice President Noli de Castro to the next hearing to shed light on his ties with De los Angeles, who was appointed president of the National Home Mortgage and Finance Corp. in 2005 on De Castro’s recommendation.
Piccio said the pre-need firm on the brink of collapse, where his wife was a plan holder, had run out of cash and was offering to pay its clients in kind with memorial lots, liquefied petroleum gas and medicines.
Barin told the hearing that Pryce Plans was found to have an insufficient trust fund but was allowed to supplement the fund through its real estate assets.
Piccio criticized the SEC for failing to advise the public to refrain from buying pension, educational and memorial plans from the company even though it was aware of its problems.
Juan Miguel Vasquez, president of the Philippine Federation of Pre-Need Companies Inc., reported that his group had adopted a plan to require its members to build up their capitalization but asked for a longer period within which to undertake it.
Vasquez said the companies failing to comply with that requirement would have to stop selling plans and start winding up operations. With Eileen A. Mencias and Rey E. Requejo
No comments yet.