The battle for PWU: Benitez clan vs. Yosi Tanco of STI
After the battles for control of Asia’s first airline Philippine Airlines (PAL) and also the real estate holdings of the Ortigas clan quieted down, another high-profile corporate conflict has recently broken out. Now it is a battle for control of the venerable 96-year-old Philippine Women’s University (PWU) and its Jose Abad Santos Memorial School (JASMS), pitting former business partners the Benitez clan of educators and politicos vs. port/insurance/education tycoon Eusebio “Yosi” Tanco of STI.
Tanco told me in an exclusive interview that his group agreed in 2011 to save PWU and JASMS from being foreclosed by BDO due to the Benitez clan’s unpaid debts of P230 million, that his group was promised 40 percent shareholdings after six months in exchange for his buying BDO’s P230 million loan and putting in an additional P200 million.
However, Tanco said the Benitezes failed to issue the shares, so the money he used to buy out the BDO loan and additional money he gave the Benitezes are now considered a loan, which they failed to repay with accumulated four-year interest, therefore they are in default. Tanco wants to foreclose PWU and JASMS to save these “mismanaged and underfunded” schools from bankruptcy, to rehabilitate them and also recoup his firms’ money. Tanco adamantly refutes the accusation that STI is inferior to PWU, asserting that STI has good-quality education and modern facilities.
The Benitezes, through my exclusive interview with the mild-mannered intellectual PWU president Jose Francisco “Kiko” B. Benitez, acknowledges the Tanco financial bail-out and that the family had indeed failed to issue him the promised 40-percent shares, and he said the clan wants to pay Tanco all the money he gave plus “reasonable interest.” He blamed the 1997 Asian financial crisis and the family’s then ill-timed expansion plans as causing their losses, but he said PWU is now changing for the better.
Dr. Kiko Benitez said the clan believes the interest Tanco is charging is “usurious and too exorbitant.” Kiko said: “Sobra pa siya sa pawnshop (He is worse than a pawnshop), he gave us only seven days to pay him P925 million!” He added: “The family’s stand is we are not in default… Well, we are in disagreement, but we are not in default because he waived interest charges in 2013… But to be fair to him, he has to get some return for his company’s money, but the question is how much?”
Accusations of Commercialization & Gold-digging
When I asked him about accusations that the Benitezes resent his commercialization plans with Ayala Land for a huge chunk of the two-hectare JASMS land, Tanco told me he was authorized by the Unlad board of directors to negotiate that deal and the school will be modernized. Tanco also added: “They’re the ones who are commercialistic; look at Amelou Benitez Reyes, she was going around digging for the so-called Yamashita gold treasures and they accuse me of commercialization?”
Kiko also admits that the clan had approved Tanco’s earlier proposal for him to negotiate for part of the combined two-hectare JASMS property in Quezon City to be the subject of a joint venture development for a mini-mall and two residential condominiums with Ayala Land, but Benitez stressed that the clan and the JASMS parents disagreed on the financial terms and design details Tanco had proposed.
Dr. Benitez said it wasn’t he but his students who said that PWU is better than the STI schools. He said, “It’s not true what Yosi Tanco is claiming that PWU is already ‘decrepit’ or ‘deteriorating;’ I will show you around our improving facilities so you can see that PWU is getting better in its facilities and in annual increase of enrolment. Our family is committed to education and public service.”
What assets are the Benitez Clan & STI in dispute over?
What are the assets in dispute? The 7,000- sqm. land of the PWU and its prewar buildings along Taft Avenue, Manila, owned by the Benitez clan’s Unlad Resources Development Corp., and control of the two-hectare JASMS along EDSA in Quezon City. Kiko Benitez estimates the assets to be worth P1.5 billion.
Despite PWU’s woes in recent years, officials told me they have educated many successful alumni, like former First Ladies Imelda Romualdez Marcos, Eva Macaraeg Macapagal, Ming Ramos, National Artist Lucrecia Roces Kasilag, National Artist Leonor Orosa-Goquingco, San Juan City Mayor Guia Gomez, the late tycoon Tan Yu’s daughter, businesswoman Dr. Emilia “Bien-Bien” Roxas-Yang, TV host Boy Abunda, Armida Siguion-Reyna, Miss World Philippines head Cory Quirino, actress Carmi Martin, etc.
Educators vs. Entrepreneurs
Who are the protagonists? On the Benitez side, the clan is still nominally led by its 100-year-old matriarch, ex-senator and former PWU president Helena Z. Benitez, but the strongest opposition to STI plans reportedly comes from her nephew, businessman Conrad Benitez. The 45-year-old Cornell- and Wisconsin-educated Kiko is a grandnephew of Helena Benitez and a nephew of Conrad’s.
The clan first rose to prominence in the 19th century with Kiko’s great-great-grandfather, judge Higinio Benitez, who was Laguna’s delegate to the revolutionary 1898 Malolos Congress.
Kiko’s great-grandfather Conrado Benitez graduated from the University of Chicago, was a former dean at the University of the Philippines, was a delegate to the 1935 Constitutional Convention, and his wife, Francisca Tirona Benitez (along with her sister-in-law, writer Paz Marquez Benitez and five other women, founded PWU in 1919). The family built a prewar mansion called “Mora-Nila” on Mariposa Street, Quezon City, which is now still the residence of ex-Senator Helena Benitez with her nurses and house help.
Kiko’s father, Stanford-educated Jose Conrado “Jolly” Benitez, was former PWU president and also the former Humans Settlements deputy minister of ex-First Lady Imelda R. Marcos.
Caught in the middle of the conflict is Kiko’s elder brother, William & Mary College mathematics graduate and Negros Occidental Congressman Alfred “Albee” Benitez, because he is the clan member who is closest to STI boss Yosi Tanco. Both Albee and Tanco are business partners in several ventures in online gaming and bingo, with over 100 outlets. Their LR Leisure Resort Corp. has a 15-percent stake in the new City of Dreams casino entertainment center in the Manila Bay area.
It was through Albee that the Benitez clan was able in 2011 to tap entrepreneur Yosi Tanco to become the white knight who prevented BDO universal bank from foreclosing on PWU due to the clan’s unpaid P230 million debt. Tanco told me in an exclusive interview, “Albee is okay; in fact, he is the only decent Benitez.”
Who is the prime mover behind the rise of the successful 85 STI colleges nationwide, including West Negros University in Bacolod City, and who now wants to foreclose on PWU and JASMS? A low-key billionaire, the 65-year-old Dr. Eusebio “Yosi” H. Tanco is a graduate of the Ateneo de Manila University. He completed his master’s degree in economics and political science from the prestigious London School of Economics, which has 16 Nobel Prize winners among alumni and current staff.
In past state visits of Philippine presidents, I observed that the unassuming Tanco was the only tycoon who often wore smart-casual attire of jeans and a T-shirt, while the other tycoons all wore suits.
Yosi is the son of the late immigrant self-made textile tycoon Agustin Tanco. His diverse business interests include Asian Terminals Inc., STI Investments Inc., Philippines First Insurance Company Inc., STI Education Systems Holdings Inc., Philippine Life Financial Assurance Corporation, Agatha Builders Corporation, PhilPlans Inc., International Hardwood and Veneer Corp., First Optima Realty Corporation Incorporated, and Mactan Electric.
Benitez family feud & court cases ended, clan now united?
Tanco mentioned that within the Benitez clan itself, there’s a bitter family feud over the inheritance of the assets of matriarch Helena Benitez, who’s still alive. He said, “They’re suing each other over inheritance of their still-alive aunt Helena, the cousins Conrad and Jolly Benitez versus all the girls — some of whom are siblings and some cousins.”
Dr. Kiko Benitez acknowledged the family feud “involving two main blocs,” but revealed that last Christmas day over lunch in their historic Mira-Nila mansion in Quezon City, the 70 members of the clan rallied together as one under his grand-aunt Helena. He revealed the initial family feud was “caused by Yosi Tanco” and ironically added that it’s Tanco’s attempted takeover of PWU and JASMS that has reunited their clan to act as one to stop his plans for their beleaguered schools.
How will this corporate battle for PWU and JASMS play out — can the Benitez clan raise the money to pay off their obligations to Tanco and STI, and under what interest-rate charges? Will the Benitezes sell some of their remaining assets or can they find another white knight to rescue them financially in order to stop what they allege is Tanco’s plan “to commercialize the schools”? How about the challenge of turning around the money-losing PWU?
On the other hand, can Yosi Tanco find a way to collect his company’s money given to the Benitez clan so they can part ways, or can he exercise his legal option to foreclose on both PWU and JASMS in order to end what he claims is the decline of these schools, which he hopes to save “by improving its management and infusing capital”?
When I asked Kiko Benitez if his clan and Tanco’s STI are still talking, he replied: “The lines of communication are still open; we are negotiating and school operations are normal.” Is Yosi Tanco still his friend? Kiko answered, “I hope so. No, I think to be fair, he’s a businessman; our family also wants him to get his investments back. He is a very shrewd businessman.”
Will this crisis be resolved soon for a win-win scenario, not only for both warring camps, but also ultimately for the benefit of PWU and JASMS?
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