Ongpin quits; related firms reel after Duterte remarks

PRICES of PhilWeb Corp. and miner Atok-Big Wedge Co., Inc. on the equities market yesterday plunged after their chairman, Roberto V. Ongpin, was singled out by President Rodrigo R. Duterte in Wednesday remarks on his wish to "destroy the oligarchs."

A disclosure said Mr. Ongpin resigned from PhilWeb "to focus on the real estate projects of Alphaland Corp."

PhilWeb lost P5.23 or 36.88% to end P8.95 per share, the lowest level it touched on the Philippine Stock Exchange (PSE) since settling at P8.50 on Dec. 12, 2014. The stock opened at P13.20 and plunged to an intraday low of P7.12 before recovering some ground in the afternoon trade.

In separate telephone interviews, First Grade Finance, Inc. Managing Director Astro C. Del Castillo and AB Capital Securities, Inc. Senior Equity Analyst Alexander Adrian O. Tiu attributed the sharp decline to Mr. Duterte's tough talk against Mr. Ongpin.

"Destroy the oligarchs that are embedded in government now," Mr. Duterte said in a speech during the courtesy call of the Pastoral Parish Council for Responsible Voting late last Wednesday.

"These are the guys na umuupo lang sa eroplano nila, umuupo lang diyan sa mga mansion nila kung saan-saan. 'Yung pera nila nagpapatak parang metro ng taxi. Sabi ko: 'Destroy.' (These are the guys whose money multiply as on a taxi meter even if they just sit in their private planes or in their mansions)," Mr. Duterte said.

"I'll give you an example, publicly, in front of the nation: Ongpin, Roberto. Malakas kay (He was then influential with Ferdinand E.) Marcos noon, (as) trade minister, I think. Malakas siya sa succession (He is a survivor. With Fidel V.) Ramos, he was a hanger-on; then kay Gloria (Macapagal-Arroyo), kay PNoy (Benigno S.C. Aquino III)."

Mr. Duterte, who earlier directed the Philippine Amusement and Gaming Corp. (PAGCOR) to revoke the license of online gambling operators, further cited Mr. Ongpin's gaming business.

"Now, he owns the online. Hindi ko nga malaman 'yung online niya... kung magkano ang nasa gobyerno (I do not know how much the government gets from his online business)," Mr. Duterte said.

PhilWeb holds a license from PAGCOR to launch Internet cafes dedicated to casino games known as e-Games stations. As of 2014, the country had 305 of such facilities nationwide. PAGCOR extended its intellectual property license agreement with PhilWeb until August 10 and will do so on a month-on-month basis pending clarification of the president's directive on online gambling.

Atok-Big Wedge also suffered from Mr. Duterte's remarks. Shares of the mining company dropped P1.30 or 11.02% to close at P10.50 apiece, the lowest price since their P10.38 June 14 finish.

Asked if the president's comments weighed down investor sentiment toward PhilWeb and Atok-Big Wedge, First Grade's Mr. Del Castillo replied: "Definitely because he was targeted."

"Usually... the president really takes action every time he has an objective. So, if he plans to get rid of oligarchs, then I'll not be surprised if he pushes through with it."

AB Capital's Mr. Tiu, however, said he expected Mr. Duterte's remarks to have "minimal effect" beyond these companies for now.

"Most businesses here in the Philippines is really owned by families of businessmen but not really linked to the government in a way they did not hold offices in government before. It's a bit different with Ongpin given he has connections in government," he said.

"Well, so far, he only singled out Ongpin. I guess we'll see how this progresses. At the moment, obviously if the president starts adding comments on other businessmen, other corporations, that will have an effect."

The president's criticism of Mr. Ongpin came amid an ongoing legal battle between the Securities and Exchange Commission (SEC) and the businessman over insider trading charges.

In a statement issued on Thursday, the corporate regulator said it will "strongly oppose" the injunction sought by Mr. Ongpin from the Court of Appeals.

The appellate court earlier granted Mr. Ongpin's petition for a temporary restraining order against the July 8 decision of the SEC en banc that found the businessman liable for 174 counts of insider trading when he purchased shares in Philex Mining Corp. and sold them to Hong Kong-based First Pacific Company Ltd. in 2009.

The SEC fined Mr. Ongpin for P174 million, disqualified him from holding high posts in public companies and ordered his resignation from such positions he now holds.

"The SEC shall strongly oppose Ongpin's injunction petition and will see to it that the Office of the Solicitor General representing the SEC will be provided with all the legal and technical assistance in the interpretation and application of securities laws," the regulator's statement read.

PhilWeb announced on Thursday the resignation of Mr. Ongpin as chairman of its board of directors "to focus on the real estate projects of Alphaland Corp."

In his resignation disclosed to the bourse, however, Mr. Ongpin stated no reason for stepping down from PhilWeb.

"I hereby tender my resignation, with immediate effect, as chairman and director of PhilWeb Corp. and all of its subsidiaries," Mr. Ongpin wrote in the letter.

The resignation of Mr. Ongpin could help ease the decline of PhilWeb on the stock exchange, Mr. Tiu noted.

"We also understand that this move is to kind of lessen the heat not only to him but also the company; although, of course, he's still the majority owner," Mr. Tiu said.

Mr. Castillo shared this view, saying: "Yes, it helps... but somehow the stain will always be there."

Diversified Securities, Inc. equity trader Anicero K. Pangan, on the other hand, believes the poor investor sentiment toward PhilWeb will persist in the coming days.

"The president is really against online gambling, based on his statements. It's unfortunate that part of Philweb's business is online gambling," Mr. Pangan said in a telephone interview.

Source: Business World Online