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Cash, house for SEC official

Philippine Daily Inquirer
March 10, 2009
by Christine Avendano

MANILA, Philippines—A pre-need company of the collapsed Legacy Group bought a house and lot at BF Homes Subdivision in Parañaque City for P5 million that a Securities and Exchange Commission (SEC) official gave to his son, a top executive of the firm said Monday.

Testifying at the resumption of the Senate inquiry into the troubled pre-need industry, Carolina Hiñola, chief executive officer of the now closed Legacy Consolidated Plans Inc. (LCPI), identified the SEC official as Commissioner Jesus Martinez.

The Legacy Group’s shuttered pre-need firms have obligations of P1.1 billion to some 50,000 plan holders.

Another LCPI executive said the pre-need firm also paid Parañaque Rep. Eduardo Zialcita P1.8 million in consultancy fees.

Martinez acknowledged at the hearing that Zialcita was his second cousin.

Hiñola said Martinez had called her up last year to “follow up the payment by Legacy to Mr. Michael Lirio (vendor of the house and lot) that was supposed to be Commissioner Martinez’s gift to his son.”

She said the pre-need firm ended up buying the house and lot at No. 7 Quenover St. in BF Classic Homes from Lirio in April 2008.

“The ownership of this house and lot was later transferred to Commissioner Martinez’s son,” Hiñola said.

She also claimed that upon the instructions of Legacy Group founder Celso de los Angeles, she handed Martinez P1.465 million in 2006 as payment for a Ford Expedition that Rural Bank of San Jose (RBSJ) had acquired.

Hiñola said she made Martinez sign an acknowledgment receipt for the vehicle and quoted the SEC commissioner as telling her, “O Carol it might be taken against me.”

She said she knew that De los Angeles was “well connected with the SEC,” pointing out that her employer was a “close friend” of Martinez’s.

“This fact is a matter often mentioned and boasted by Mr. De los Angeles in our meetings,” she said.

Luncheon meeting

Hiñola said she was able to confirm this when she met with Martinez at a Japanese restaurant in Shangri-La Makati on Feb. 14, 2006.

Because De los Angeles could not make it to the meeting, Hiñola said she, LCPI chief finance officer Namnama Pasetes-Santos and a lawyer met with Martinez to convey De los Angeles’ apologies.

Hiñola said Martinez, who was accompanied by Zialcita at the luncheon meeting, asked whether Legacy had any problems that “he could help us with.” She told him there was none.

Hiñola met Martinez again at the Linden Suites in Ortigas Center in Pasig City on Nov. 9, 2006, this time to hand over the P1.475 million.

“The money came from RBSJ and was supposed to be payment to Mr. Martinez for the Expedition acquired by RSBJ,” she said.

“What I know is that while the Expedition was booked for the account of RSBJ, it was Mr. De los Angeles who personally used the same.”

Martinez initially denied the allegations but eventually admitted that it was his son, Jesus Martinez III, who had dealings with De los Angeles.

The SEC commissioner said he could not recall meeting with Hiñola on Feb. 14, 2006, and that it was impossible for him to see her on Nov. 9, 2006, because that was the SEC anniversary.

Martinez denied owning or selling a Ford Expedition but volunteered that it was probably his son’s because the latter was involved in the buy-and-sell business.

Martinez also admitted that his son bought a house and lot in Parañaque in April last year.

Credit card, text message

Hiñola stood by her statement that she had lunch with Martinez, saying that she used her credit card in paying the P22,000 bill for the Feb. 14, 2006, meeting with Martinez and Zialcita.

To further prove that Martinez knew her, she read to senators a text message sent to her by the SEC commissioner in October last year in which she asked whether De los Angeles had changed his cell phone number because the Legacy Group founder was not acknowledging his text messages.

An irked Senate President Juan Ponce Enrile told Martinez: “You’re lying here. We’ll see to it you’re disciplined.”

Martinez told Enrile he had called Hiñola twice.

Three checks

Hiñola also brought out for senators to see original copies of three checks dated March 31, 2008, each amounting to P1 million for the property in Parañaque.

“But according to Ms Santos, she paid an additional P2 million. This (house and lot) cost P5 million, we just can’t locate the checks (for the additional P2 million),” she told Enrile.

Hiñola said the checks were payable to Lirio, prompting Enrile to say that “there was evidence now that Legacy bought a house and lot for the son of this commissioner.”

Martinez cut in, insisting that Legacy did not buy anything for his son. “There was no Lirio in the deed of sale,” he told Enrile.

Hiñola said that while the checks were payable to Lirio, the checks had an attached note from Legacy lawyer Victoria Noel “regarding the transfer of title from Lirio.”

Martin Niccolo

“The title was first transferred to the son of Mr. De los Angeles, who is Martin Niccolo de los Angeles, and after that it was transferred to the son of Commissioner Martinez,” Hiñola said.

She said the house and lot was very close to the house of Martinez.

Martinez told Enrile that his son bought the house and lot in BF Classic Homes from the son of De los Angeles in April last year for P3.2 million. He explained then that his son and De los Angeles’ son were old friends.

Enrile then asked De los Angeles whether he bought a Ford Expedition from Martinez.

“I have many Expeditions but I didn’t buy any one of them from Martinez,” De los Angeles said. He also denied having issued instructions to Hiñola and Santos regarding the transactions with Martinez.

Asked whether he and Martinez had a close relationship, De los Angeles could only recall that he paid the SEC commissioner a courtesy call when LCPI merged with other Legacy firms.

Spin Management

At the hearing, Jose Nograles, president of the Philippine Deposit Insurance Corp. (PDIC), confirmed that De los Angeles had purchased the SUV and that the PDIC had issued a demand letter to RBSJ.

Nograles said the Expedition was registered to Spin Management Corp.

Sen. Manuel “Mar” Roxas II, chair of the Senate trade and commerce committee, asked the PDIC president how come the vehicle was registered to Spin Management.

“Maybe the original owner is Spin Management Corp. and the title or the registration might not have been transferred to RBSJ,” Nograles replied.

Martinez acknowledged that Spin Management was a company owned by his son.

“So now is the big aha moment … you have been hiding this, you have not divulged this,” Roxas told Martinez.

This showed that the Martinezes were involved in two transactions with Legacy, the senator said.

Roxas asked Martinez whether these transactions were big favors, especially the Expedition because the registration of the car still remained under the name of the company of the SEC official’s son.

Martinez said he would ask his son a copy for a deed of sale.

Roxas then asked whether Martinez found “anything wrong with the latter’s son doing business with Legacy which later ended up bankrupt.

No favor

Martinez told Roxas that his 31-year-old son was old enough to do his own business.

“If the buyer of the Expedition that was being sold … was sold by my son to a rural bank … I don’t know how that it will affect me. Because, first of all, I had nothing to do with a rural bank; secondly, I do not know if a favor was asked of me because there was no favor asked of me,” Martinez said.

Explaining the real estate transaction, Martinez insisted that his son was an old friend of De los Angeles’ son and that before buying the property, he had rented it for seven months.

Retiring this month

Enrile called for the resignation of Martinez for allegedly receiving bribes from De los Angeles.

“Honor dictates that you people must go,” Enrile said.

“Your are responsible for this mess.”

Martinez later told reporters he was retiring from the SEC this month. With a report from Philip C. Tubeza

March 10, 2009 - Posted by | Philippine Newspapers/Web News | , , ,

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