How to steal: a primer
How to steal: a primer
http://www.uniffors.com/?p=3655
LITO BANAYO/MALAYA
‘One of them wants to be president of the benighted land.’
ROHAN Douglas is an adjunct professor at the Polytechnic University in New York and at the Macquairie University Applied Financial Centre in Australia and Singapore. He is also the founder and CEO of Quantifi, Inc, a leading provider of pricing models and risk analysis tools for structuring credit. He used to be director for global research at Citigroup and Salomon, Smith and Barney.
In his book titled “Credit Derivative Strategies”, he wrote about the financial prowess of a well-known Filipino, Manuel B. Villar Jr.
On Page 30 of his book, Douglas mentions Villar: “One example was C & P Homes, a Philippine corporate property developer of low-end housing. The company owned a substantial amount of land around Manila and had issued dollar-denominated debt to finance its land purchases and to develop the land. However, when the Asian crisis occurred in 1997, land values collapsed and the company ran out of cash. The company suggested a restructuring under which creditors would have taken a large haircut. Creditors explored legal avenues to foreclose on C & P’s landholdings. However, despite spending substantial time and legal fees on these efforts, creditors were unable to gain control of company property or force liquidation, because of reliable bankruptcy laws in the Philippines.”
“C & P’s controlling shareholder was Senator Manuel Villar who was able to use his position to further stymie creditor efforts to force a restructuring, or foreclose on C & P properties.”
Many other politicians in the country use politics as tool to further their business interests. In the old days, armed with prior knowledge of where a new road or highway would pass, these politicians would buy adjacent lands, so that when the thoroughfare was built, they hit the jackpot in rising land values. Some would even donate their lands so that government would build a road, or a schoolhouse, even the kapitolyo or city hall. With higher land values in the periphery, they then developed subdivisions or build commercial centers. That was acceptable “kalakaran” then and even now.
But how do you describe a situation where a politician’s company produces spurious titles to land, drives away long-time residents of the land who possess no title, only continued cultivation and possession, and then claims the land for itself? Is that still normal “kalakaran”?
How about when the same company, utilizing questionable titles to the land, goes to the housing agencies of government and proposes to build low-cost housing, with government financing the low-cost housing buyers, where the developer gets paid in advance by government as soon as the buyer’s loan is approved?
That may be normal SOP. But what happens when the developer colludes with the housing agencies, and produces fictitious “buyers”, who “take out” the housing units, present the documents to government and forthwith gets paid for it? The housing agencies and its corollary funding institutions take a hit, and are left holding empty bags. Charged, once again, to the taxpayer. Butas na naman ang kaban ng bayan. Is that normal “kalakaran”?
What happens when the low-cost housing developer, now brimming with so much business, goes to banks to borrow to finance their expansion plans? Better yet, the owners buy a bank, re-name it, and operate the same. Then they proceed to hollow out the bank by borrowing heavily from it. When dollar loans were quite cheap compared to local financing, housing firm and the bank itself borrows heavily.
Then the Asian crisis happened. Thai businessmen, desperate at the turn of events and facing bankruptcy, threw themselves off their buildings. But in the Philippines, not to worry is the prevailing attitude to such crises. Just pass the bill to the Philippine government. You can do that if you are an astute and powerful politician, such as when you are a Speaker of the House, or President of the Senate. And of course, if you become President of the Philippines.
Your bank goes under? Get help from the Bangko Sentral ng Pilipinas. Borrow heavily. Sign even short-term promissory notes. Meanwhile, hollow out the bank of whatever assets it still has. And when Bangko Sentral goes collecting, there is nothing to collect. So you allow them to foreclose what worthless assets you have left.
Worthless? Well…as in lands with questionable and spurious titles. And/or, overvalue those lands before you give them up.
But will not the Bangko Sentral exercise due diligence, inspect the properties, check the titles in the Registry of Deeds, the Land Registration Authority, whatever and wherever else? Will they not compare zonal values versus current market values, and price these by conservative standards, just like our banks do when we go to them for a small loan?
That’s only for small fry like you and me. Not for the rich and famous. And certainly not for the powerful and the influential. Most certainly not for politicians who happen to be big businessmen as well.
That is the state of the benighted land where politics is business, and businessmen enter politics to further their interests, and when threatened by the normal ups and downs of business risk, protect their interests at the expense of Juan de la Cruz.
One of them wants to be president of the benighted land.
***
A few months back, the matter of politics as business was taken up in a conversation with a politician who happens to be behind bars because of principles he espoused and refuse to give up, a most admirable person indeed. When the particular example of this man who would be president was taken up, I was aghast at what the idealistic public servant said, “He explained his side to me. Ganyan naman daw talaga ang kalakaran.”
Perhaps the man who would be president explained to the idealistic public servant “his side” of the multi-billion controversy in such fashion that it would seem like the usual. I did not use the meeting to debate the legality or morality of what was explained to the idealistic person as “normal kalakaran”, as we had other things on our plate. But I do hope he takes time to read the report of the Senate Committee of the Whole, and wonder some more how someone who refuses to answer charges before his peers, even when he is called a “coward” and a “bribe-offeror” could possibly merit even the least of his esteem.
