Yasay: Estrada intervened in BW probe

Now it's on record.

Securities and Exchange Commission Chairman Perfecto Yasay Jr. reiterated under oath yesterday his accusation that President Estrada intervened in the SEC's probe of the alleged price manipulations involving Best World (BW) Resources stocks in the bourse late last year.

Testifying at a public hearing of the Senate committee on banks, financial institutions and currencies, Yasay said he got three or four calls from the President between October and November last year demanding an explanation "on why he was investigating BW."

Yasay told senators he was ordered to "immediately terminate my investigation" and clear certain individuals, including businessman and presidential ally Dante Tan of BW Resources.

Mr. Estrada allegedly asserted that Tan could not possibly be involved in the irregularity since the businessman was more of a victim than an offender.

Yasay also said the Chief Executive directed him to drop the investigation on Tan and run instead after other people suspected of complicity in the anomaly.

Committee chairman Sen. Raul Roco said Yasay's allegations against the President needed a closer look.

"I hope they should explain that to the public. It's in the interest of the Office of the President to keep the market aboveboard," Roco stressed.

Yasay also said Mr. Estrada expressed concern that the BW probe might backfire on the country's image in the international community as it would not look good if a stock that has been performing well on the bourse would be subjected to an investigation.

"I told him (Mr. Estrada) that it was my job. That it would reinforce the responsibility of the Office of the President to ensure that all business transactions are clear and transparent," Yasay said in his testimony.

For his part, Tan said "I do not believe the President will do such a thing realizing the adverse impact on the integrity of the Exchange and on the presidency itself."

"I have never asked nor have any plans of soliciting the help of the President about this case since it is in my best personal interest that the case run its normal course and clear our name of any alleged wrongdoing," Tan added.

The Associated Press (AP) has described Yasay's allegations against the Chief Executive as "politically explosive."

"Bedevilled by allegations of cronyism, corruption and incompetence, the Estrada administration is battling to regain the confidence of the business community and foreign investors, while the President's personal popularity has fallen badly in recent months," the news agency said.

It added that Tan, a businessman who purchased a large number of BW shares, reportedly contributed to Mr. Estrada's presidential campaign.

Mr. Estrada and Yasay have been at loggerheads since the President took office in June 1998.

Yasay, whose seven-year term expires in 2004, has stuck to his post despite attempts by the Estrada administration to unseat him.

Yasay had a falling out with the President last October over the pending investigation by the SEC on the alleged stock market manipulation by BW Resources Corp. whose owners are closely identified with the Estrada administration.

The Office of the President (OP) sent a stinging memorandum to the SEC chairman ordering him to desist from speaking about the alleged stock market fraud which saw the price of BW stock increasing exponentially shortly after Macau gambling tycoon Stanley Ho bought into the company.

The winning streak of BW however proved short-lived and its share prices plunged just as drastically, fueling reports that some inside traders had made a killing at the stock market.

The SEC, the Philippine Stock Exchange (PSE) and the Senate separately launched inquiries into sharp swings in BW's share price following complaints from investors, some of whom lost substantial amounts of money.

After opening at P2.04, BW stock rose sharply amid rumors that gambling would become the company's core business and that Tan would acquire a controlling interest in the company.

The stock hit a record high of P107 on Oct. 11 after Ho accepted an offer by Tan to take control of BW. A day later, the stock plunged to P68, leaving many investors saddled with heavy losses.

The stock slid further and closed at P9.40 on Wednesday last week.

Preliminary findings of the PSE probe showed that some brokerage houses were guilty of so-called wash selling. This involves the creation of artificial demand in a stock, whose price is ramped by a broker buying and selling the same shares.

Yasay out after

The President has also claimed that it was Yasay himself who told Executive Secretary Ronaldo Zamora last month that he would submit his courtesy resignation, along with Cabinet members and other heads of line government agencies.

Yasay said, however, that he is willing to step down after Congress has enacted the Securities Act of 1999 that would set in motion the reorganization of the SEC.

Yasay said he expects the proposed law, one of the Malacañang-certified bills, to be passed this week by the House of Representatives and ratified by the bicameral conference committee next week.

In a letter he sent to Malacañang last week, Yasay stated that he has retained the legal services of former Senate President Jovito Salonga to advise him on whether he should resign or not.

The letter also cited possible ramifications of "political interference or influence" to the independence of the SEC as a quasi-judicial body in the performance of its regulatory functions and powers to discipline erring private companies.

While Yasay did not submit his required courtesy resignation last December, the President moved to remove the SEC from the OP and returned control and supervision of the quasi-judicial body to the Department of Finance.

Yasay wrote the President last Jan. 11 explaining his reluctance to give way to the next appointee until certain conditions are met.

"I am confident that President Estrada will see the wisdom of my suggestion," Yasay said. The Securities Act of 1999, already approved by the Senate, is also slated to be passed soon by the House.

Yasay confirmed he was asked to step down so that the Estrada administration could complete its reorganization in a bid to regain its sagging popularity resulting from the perceived corruption and rift among government agencies.

"My resignation is not a problem but if he (the President) feels I should resign, I want to make sure my resignation will help him, otherwise I will not be acceding to what he told me to do," Yasay explained.

He said upon passage of the Securities Act, the President can have a free hand in reorganizing the commission and make "the Philippine securities market more attractive to foreign investors and competitive with other world markets."

The embattled SEC chairman has expressed concern about talks that the PSE has revived its proposal for Congress to lift the rule prohibiting brokers/dealers from dealing in listed stocks where they are also officers of the issuing corporations. -- With AP report