Leadership rift triggers shake-up
MANILA, Philippines — The Government Service Insurance System (GSIS) has announced the appointment of three new members of its board of trustees following the resignation of some board members who called for the departure of the state pension fund’s president and general manager Jose Arnulfo Veloso.
The state pension fund said the new appointments would enable its leadership to function as a unified and cohesive team, committed to delivering responsive public service.
The new appointees are Gilbert Tan Sadsad, the president of the Philippine Public School Teachers Association and Enrico Gregorio Molina Trinidad and Cenon Cruz Audencial Jr., representing the banking, finance, investment and insurance sectors.
The GSIS expressed confidence in the newly appointed trustees, saying their extensive experience would be invaluable in sustaining and building upon the pension fund’s previous achievements.
“This development allows the GSIS leadership to work as a solid and cohesive team. Our focus remains squarely on enhancing our ginhawa services and ensuring the financial security of government workers and pensioners,” GSIS said.
The appointment of the new trustees follows the resignation of Ma. Merceditas Gutierrez, Emmanuel Samson and Rita Riddle.
The three members who resigned, together with other members of the board of trustees namely Evelina Escudero, Jocelyn Cabreza and Alan Luga called for the resignation of Veloso, citing “poor investment decisions” that allegedly resulted in an P8.8-billion loss.
They said that Veloso’s actions and endorsement of risky transactions compelled them to act, asserting that such initiatives were not only questionable but also constituted a direct violation of the GSIS’s fiduciary duties.
The group cited several transactions involving companies such as Monde Nissin Corp., Nickel Asia Corp., Bloomberry Resorts Corp., DigiPlus Interactive Corp., Alternergy Holdings Corp. and Figaro Culinary Group Inc., among others.
In an interview with dzMM on Monday, Veloso clarified that all GSIS investments were made with the full knowledge and collective approval of both the board and management, emphasizing that such decisions reflected the actions of the entire GSIS leadership rather than a single individual.
“If the board feels that they would like to do management roles, that is going to be a totally different story. That is why we would like as much as possible to be able to make sure that all of those things are addressed,” he said.
Veloso earlier maintained that the pension fund’s performance “speaks for itself,” noting that GSIS’s total assets have risen to P1.92 trillion, with a net income of P100.02 billion and total income of P231.06 billion.
The former members of the GSIS board of trustees, however, said that the “reported growth in the fund’s assets was largely inflated by non-cash, unrealized gains from the annual revaluation of its property portfolio.”
“The very purpose of a board review is to provide a crucial layer of scrutiny, risk assessment and collective judgment. It was precisely by evading this mandatory review process that Veloso was able to proceed with the high-risk, underperforming ventures that have now resulted in substantial losses,” the resigned trustees said in another letter.
They added that their review showed that the new investments introduced and endorsed by Veloso had largely underperformed, with most reportedly incurring significant losses.
Veloso and other executives of the GSIS were suspended by the Office of the Ombudsman last July in connection with the state-run fund’s P1.45-billion investment deal with Alternergy.
The suspension was lifted last month as case records and submitted pleadings already contain the necessary documents and evidence for the proper resolution of the case, rendering the suspension unnecessary and warranting its lifting.