Veloso says govt insurance agency leaders to cooperate
Finance Secretary Ralph Recto has ordered a full review of Government Service Insurance System (GSIS) investment policies following the controversial P1.45-billion deal with Alternergy Holdings Corp. that has led to the suspension of the state pension fund’s top leadership.
“The Department of Finance will be reviewing rules set out by Congress in the GSIS Charter and Board-approved investment policies,” Recto told Malaya Business Insight on Tuesday. “We will see if all rules were followed.”
GSIS President and General Manager Jose Arnulfo Veloso, who was among the seven officials placed under preventive suspension by the Office of the Ombudsman, said the agency “is cooperating fully” with the investigation.
“As the inquiry is ongoing, we will refrain from additional comments for now,” he added.
The Ombudsman on July 15 found sufficient grounds to suspend Veloso and six others without pay, citing grave misconduct and gross neglect of duty in the Alternergy transaction.
The six others are Executive Vice Presidents Michael Praxedes and Jason Teng; Vice Presidents Aaron Samuel Chan and Mary Abigail Cruz-Francisco; and officers Jaime Leon Warren and Alfredo Pablo.
Based on the Ombudsman’s preliminary findings, the GSIS subscribed to Alternergy’s perpetual preferred shares in November 2023 — even though these were not listed on the Philippine Stock Exchange and allegedly breached several internal safeguards.
Unapproved, unendorsed investment
The investment, the Ombudsman said, was not approved by the GSIS Board of Trustees nor endorsed by its Asset Liability Management Committee (ALCO) or Risk Oversight Committee.
It also flagged Alternergy’s sub-P15 billion market capitalization and the risk of exceeding GSIS’s allowable exposure to a single stock.
Recto chairs the ALCO, which is tasked with overseeing the financial health and investment posture of government financial institutions (GFIs).
The DOF is now under pressure to ensure no similar lapses occur under its watch.
Veloso said the GSIS welcomed the scrutiny.
“This is an opportunity to affirm the integrity of our investment decisions,” he said in a statement.
Alternergy, chaired by former Energy Secretary Vince Perez, has denied any wrongdoing.
Investment & Capital Corporation of the Philippines (ICCP), which advised on the deal, defended its due diligence process, citing compliance with regulatory disclosures and investor protection standards.
“We followed all regulatory requirements of the SEC and the PSE,” ICCP President Manny Ocampo. “The deal was done in accordance with market practice and the principles of fairness and transparency.”
The GSIS leadership may face further administrative charges once the Ombudsman concludes its probe. If found guilty, they could be removed from service.
