Tuesday, March 17, 2009

Securities and Exchange Commission : Legacy’s pre-need firm anomaly

For claiming that she has no history of misdemeanor during her 53 years in public service, Securities and Exchange Commission (SEC) chairperson Fe Barin is being taunted by her critics who have unearthed a paper trail that involves a deal between her husband and one of the companies she regulates.

Documents made available to Newsbreak and ABS-CBN News showed that pre-need firm Legacy Consolidated Phils., Inc paid for the cost of transferring the ownership of a sports utility vehicle (SUV) previously owned by Alejandro Barin, the SEC chair’s husband.

A check voucher dated August 6, 2007 showed that Legacy’s pre-need firm issued a check to its assistant vice-president for administration, Agnes Santiago, to advance P5,400 for the cost of the transfer. (Santiago is one of the Legacy officers implicated by the regulators, Bangko Sentral ng Pilipinas (BSP) and the SEC, in the syndicated estafa cases filed at the justice department).

The vehicle is a 1997 model of Mitsubishi Pajero that the internal Legacy Consolidated office memos referred to as “previously assigned to Atty. Alejandro Barin.”

The pre-need firm’s senior vice-president Christine Limpin, signed the internal memo authorizing the cash advance. According to ABS-CBN News’ research, Limpin is now the registered owner of the vehicle

One question nags: Why was Limpin able to source funds--however meager--for the purchase of a car from a company that has a fiduciary duty to its pre-need plan holders?

However, another question seems as important: Why was the SEC chair’s husband involved in a deal with a company that the chair regulates?
Regulator

The SEC chair oversees the pre-need industry, a retail financial services industry engaged in selling quasi insurance and investment products focused on funding planholders’ future needs for education, pension, and memorial.

In the wake of the revelations made at a Senate hearing last week that Jesus Martinez, one of the five SEC commissioners, received cash and a property from Legacy’s founder Celso de los Angeles, legislators have called for the resignation of all five SEC commissioners.

Senate President Juan Ponce Enrile and Senate Trade and Commerce committee head Mar Roxas specifically asked for Barin to tender her resignation for being remiss in regulating the pre-need industry.

In a press conference in Malacanang, however, SEC chair Barin said she has no intention of resigning. She stressed, "I will be 75 soon. I spent 53 years, more than half of my life, in government. I hope it will not end this way." She said she will carry on with her job and has no plans of stepping down or going on leave unless asked by President Arroyo herself.

In the continuing messy saga of the Legacy Group of financial service firms, the paper trail involving the Pajero deal puts Barin as the latest in the growing list of politicians and political appointees dragged in the efforts to follow the money in this multi-billion peso controversy.
No smoking gun

Unlike the paper trail that involved Martinez, however, the paper trail for the Pajero deal falls short of being a smoking gun.

In the Senate hearing last week, de los Angeles transferred a property in Parañaque City to the name of his son, Nicolo Martin, who in turn sold it to Martinez’s son. (In a media interview last week, Nicolo Martin tearfully denied being aware of the deal's implications. He said he just followed his father's instructions to sign the sale documents).

The timing of the transaction was questioned at the Senate since the sale between the sons of de los Angeles and Martinez occurred at a time when the three Legacy pre-need firms could not obtain a dealers license from a SEC unit that Martinez oversees.

Not long after the property sale, the Legacy pre-need firms were granted their dealers license in April 2008, essentially paving the way for the firms to amass more funds from the unknowing public.

This direct link was not as clear in the Pajero transaction involving Alejandro Barin, the SEC chair’s husband.

Mrs. Barin told ABS-CBN News that they owned the Pajero since 2001 and that she confronted her husband in 2007 when she learned that he sold it to Legacy’s officer, Limpin.

“When I came to know about the sale, I asked him why do you have to deal with them? You know that you are not supposed to deal with anyone who intends to do business with the SEC, so please lay off,” Mrs. Barin narrated. She added that Mr. Barin did not intercede in Legacy’s transactions in SEC.

There was no proof available that the Barin couple earned a handsome fee from the Pajero sale.

In 2007, around the time the Pajero sale occurred, Legacy Consolidated was one of the troubled pre-need firms that did not meet SEC’s requirements before the regulator renews their permits to continue operations.
Lubao

Atty. Alejandro Barin hails from Lubao, the hometown of President Arroyo.

In the late 1950’s, Mr. Barin was a junior associate at the law firm of President Arroyo’s father, Diosdado Macapagal. When the older Macapagal became president in the sixties, Mr. Barin declined the latter’s offer to join the cabinet, but he inherited the law firm’s big-time clients, including the rich Arroyo family.

In the seventies, Mr. Barin and Mike Arroyo, who eventually became President Gloria Arroyo’s husband, became partners in a law firm.

Mr. Barin is currently one of the commissioners at the Energy Regulatory Commission (ERC). He was once the officer-in-charge until Zenaida G. Cruz-Ducut, another political appointee from Lubao town, took over as chairperson in July 2008

Mrs. Barin was the first to chair ERC when it was constituted in 2001. -- with Lynda Jumilla, ABS-CBN News (abs-cbnNEWS.com/Newsbreak)

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