SCUTTLEBUTT

More trouble brews

Aside from the P1.45-billion investment in renewable energy firm Alternergy Holdings Corp. that triggered the Ombudsman’s six-month suspensions for Government Service Insurance System (GSIS) president and general manager Jose Arnulfo “Wick” Veloso and six other officials, there are other unusual investments executed in the state pension fund.

According to an insider, the same GSIS executives are also under scrutiny by some board members over the accumulation of shares in Metro Pacific Investments Corp. (MPIC) prior to its delisting from the stock exchange.

From August 23 to September 4 last year, GSIS acquired stocks of the private company to increase its stake from 3 percent to 3,438,549,038 ordinary shares, representing approximately 11.98 percent of the total outstanding common shares of MPIC.

The Commission on Audit stated in its 2023 report that GSIS has invested P34.5 billion to secure an 11.56 percent ownership stake in MPIC.

The investment, based on the CoA report, is the most significant exposure of GSIS in a private firm.

Before the 9 October 2023 voluntary delisting of MPIC, GSIS had acquired additional shares enough to entitle it to a board seat. This paved the way for the election of GSIS President and general manager Wick Veloso to represent GSIS on the board of MPIC.

The maneuver resulted in huge gains, not for the state employees who are members of GSIS, but for Veloso.

It was a glowing public image coup for the GSIS boss with some analysts saying that “it is rare for a government institution to display such prowess in the realm of strategic market trading.”

A greater gain for GSIS members would have been to call the buyback after GSIS increased its stake, which was not exercised, as it would have meant losing the seat in the conglomerate.