FIFTEEN years after the Development Bank of the Philippines (DBP) sold 50 million Philex Mining Corp. (PMC) shares to Deltaventures Resources Inc. (DVRI) for P637.5 million, the Commission on Audit has finally put to rest any question of irregularity regarding the transaction.
In a nine-page decision released last week, the COA En Banc affirmed the lifting of the notice of charge (NC) issued on June 16, 2014 alleging that the state-owned bank incurred a “loss of opportunity trading gain” in the amount of P412.5 million.
A notice of charge is issued by an auditor if there is a finding that the amount assessed/appraised, billed, or collected is less than what is due government.
An audit observation memorandum (AOM) issued on July 19, 2011 questioned the sale of the Philex Mining shares to DVRI at P12.75 per share on Nov. 5, 2009 when another transaction 27 days later priced a different batch of Philex Mining shares at P21 per share.
The audit team said if the DBP had waited 27 days to sell the 50 million Philex Mining shares, it would have earned P1.05 million or P412.5 million higher than what it made for selling earlier.
Among other issues raised was the acceptance of a 20 percent downpayment from DVRI or P127.5 million with the balance of 80 percent or P510 million considered a loan to the buyer covered by same shares as collateral.
In a ruling dated Sept. 20, 2016, the COA Corporate Government Sector – Cluster 1 director held that the DBP was not deprived of trading gain since the nature of stock market trading is speculative, hence the value of a specific share may vary from time to time, depending on various factors.
The same ruling noted that a criminal case for alleged behest loans filed with the Sandiganbayan based on the same allegation of irregularities was thrown out by the anti-graft court in a resolution promulgated on May 28, 2014.
In its decision on the automatic review, COA chairperson Gamaliel Cordoba and Commissioners Roland Café Pondoc and Mario Lipana sustained the stand of the cluster director that the difference in sale prices of the Philex Mining shares is attributable to the volatility of the stock market trading.
“The sale was a risk management decision faithful to the rules of safety and prudence. This call should not be questioned or given ill motives simply because of pure speculation,” the Commission said.
It held that despite the variance between the sale prices in November 2009 compared to December 2009, there was no actual loss to the DBP.
“Therefore, there is no under assessment, appraisal nor collection from NC can be based. There being no opportunity trading gain on the sale of the PMC shares in November 2009, there can be no loss suffered by DBP,” the COA added.
