Mystery unravelled

HIDDEN AGENDA () - May 7, 2006 - 12:00am
By tomorrow, May 8, the investing public which has been taken for a very long roller-coaster ride by GSIS president and general manager Winston Garcia, will finally know the identity of the alleged foreign buyers, if any, for the GSIS‚ 12.4-percent equity block in Equitable PCIBank (EPCIB).

At last, the guessing game and the mystery comes to and end. Despite GSIS’ claim that there are interested buyers for its stake in EPCIB, the last two auctions were a no show. This is the third time and hopefully the last that an auction will be held.

These mysterious buyers should formally present a binding offer for the GSIS shares at a floor price of P92 per share as announced in the paid ad of GSIS. This was the price it paid for the shares during the previous administration.

The saga of the unknown buyer, which rivals the enigma of the Da Vinci Code, started in January this year when Garcia, in his effort to prove that the P56 per share offer by the SM group is low, announced that he has two foreign buyers willing to buy the GSIS shares at P92 to P95 per share or a total of P8.5 to P9 billion.

March 6 came and went but no buyer emerged. Garcia had no other recourse but to extend his offer by one more month. Again, April 6 came and went but no buyers came out of the woodwork. Once again, Garcia extended the deadline to May 8. Let us see if the mysterious buyers will finally come out and make an honest man of Garcia. But investors are advised not to hold their breath.

From the time Garcia announced in January this year that he has foreign buyers, EPCIB shares rose from P62.50 to P82 per share. It has since gone down to P72 per share as of last week.
Labor dispute brewing
PLDT finance guys Celso Dimarucut and Jojo Ibay are persona non grata as far as employees of the PLDT finance department who were unceremoniously discharged from their positions which they have held for far longer than these two have.

Certain employees were told that "due to process improvement and technological changes," there was an excess of positions. When asked for the manner of selecting who should go and who should stay, Dimarucut said certain criteria were followed in consultation with the department head, Ibay, who was on bereavement leave. He then advised the employees to either avail of the mandatory redundancy program (MRP) or be redeployed if there’s an opening.

The affected employees were asked to vacate their workplaces effective May 2 and even before they were informed that they were being dismissed due to redundancy, their access to the Systems Application Program (SAP) was terminated. Dimarucut also informed them that starting May 2, they will be reassigned to the Placement Opportunity Center where they will have to wait for a job opening.

It appears that some of those who will be retained and who will be absorbing the workload of the dismissed employees are not qualified. Non-accountants will be doing the work of accountants, in short.

During the meeting of those who will be retained, some even volunteered to give up their jobs in place of those who needed the job more but according to Dimarucut, this can’t be done without giving any explanation.

There are rumors that in exchange for the termination of the employees, Dimarucut and Ibay will be receiving a higher variable pay.

There are talks though that Ibay was forced by Dimarucut to terminate the employees. He was given the number of heads to chop off. If left to Jojo, he would have kept most of the employees because the whole finance team of PLDT is undermanned.

If there is a redundant employee, it is Dimarucut, insiders say. He comes to work shortly before lunch and leaves early. And since he just orders his people to do all the work, then the few remaining employees will even be more loaded with work. His people slave till 3 to 4 in the morning, while Dimarucut takes off at 5 pm.

But more importantly, why would a company earning P30 billion lay off people? Isn’t that pure greed and heartlessness? The long-term incentive plan or bonus of Dimarucut is enough to pay the salaries of most of the terminated employees. Maybe top management should review the very high LTIP bonuses of the executives instead of firing the lowly employees.

The biggest fear of top management is if the 9,000-strong rank-and-file and supervisors‚ unions band together and go on strike. This will leave a skeleton force of less than 500 executives and officers to run the company. With this move of Dimarucut, both union heads have reportedly started talking about joining forces. Dimarucut may have just started the downfall of the biggest company in the Philippines.

Dimarucut reports to Annabelle Chua, the treasurer of PLDT and Chris Young, the chief financial advisor. The employees are looking to Chua and Young to intercede and do what is right unless the order came from them.
Insurance’s new kings
Outstanding individual performers in banking are slowly taking over leadership positions in the insurance industry. Not too long after Philippine National Bank miracle man Lorenzo Tan successfully maneuvered Sun Life to within striking distance to current number one Philam, his very good friend and fellow investment banker Andy Alcid is joining in the foray by coming in as president and CEO of Metrobank’s Philippine AXA Life. Alcid, I was told, was formally elected to the position shortly before Labor Day and will get down to work by the second half of this month.

The development now makes the three-cornered fight in the industry a bankers’ game. Philam’s Joey Cuisia, after all, was a former Central Bank governor, no less! With Lorenzo’s aggressive catch up move and Andy’s fire and enthusiasm to make his mark we surely can expect major fireworks in this formerly boring industry.

His election is sweet victory for Alcid who has been in the wings for a CEO post for sometime now. Taking over Lorenzo as OIC-COO of UCPB in 2002 (incidentally it was Lorenzo who hired Alcid as his EVP), when the former decided to take on the PNB challenge, US-educated Alcid eventually had to graciously give way to Jojo Querubin when the PDIC put in money into the sequestered organization. From there, he moved on to become the COO of Banco de Oro Private Bank (formerly Banco Santander), where he quietly made significant changes that primed the exclusive institution to sustained future growth.

His big break finally came when Phil-AXA, which has been scouring the market for a new CEO for the longest time, chanced upon his resume and immediately became impressed with his past achievements.

While some cynics are already raising concerns that Alcid‚s banking background will be of no help, some supporters say Alcid has proven himself a convincing and persuasive sales person by helping sell and dispose a good chunk of UCPB’s bad assets when he was still with the bank. I hear even Lorenzo is willing to vouch for his friend-turned-competitor’s selling skills. Guess, we‚ll just have to see how exactly Alcid will do in the department once he buckles down to work.

Now, will this development make the bond between the friends break or will it just make it stronger. Will they go head-to-head in competing against each other or join forces in toppling down the industry leader? Only 10 months after Lorenzo joined Sun Life, the latter was able to overtake Philam‚s pre-need business. Now will the two Davids get the Goliath finally grounded? Are we seeing the dawning of a new era, with these bankers taking over as the new kings of the insurance world? We‚ll surely be keeping a tight watch.

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