CoA backstops Ombudsman

Embattled Government Service Insurance System (GSIS) president and general manager Wick Veloso has stooped to resorting to gaslighting Samuel Martires, who issued a preventive suspension against him and six other officials of the state pension fund.

“My preventive suspension is based solely on an anonymous and unverified complaint purportedly filed against me. My preventive suspension was issued without the Ombudsman considering my counter-affidavit,” Veloso said in a statement.

He insisted “the Alternergy investment complied with all applicable investment rules and regulations” of the pension fund.

“Based on the records of GSIS, and narrated under oath in my counter-affidavit, the investment of GSIS in Alternergy underwent rigorous evaluation and endorsement by the GSIS investment team, whose technical expertise in financial instruments and risk assessment confirmed that the Alternergy investment fell squarely within established parameters,” Veloso said.

He strongly argued that Martires had acted on complaints by anonymous sources but he failed to mention that the Commission on Audit (CoA) had issued an adverse report on the P1.45-billion investment in Alternergy Holdings Corp., a company founded by former Energy Secretary Vince Perez.

Specifically, the CoA noted that the Alternergy investment, made in November 2023 for 100 million perpetual preferred shares, violated GSIS’ 2022 Investment Policy Guidelines (IPG), which was the same issue that the Ombudsman wanted probed and was the basis for Veloso and company’s suspensions.

The issues included non-compliance with market capitalization rules as Alternergy’s market capitalization at the time of the investment was P3.029 billion, significantly below the IPG’s required minimum of P15 billion for core portfolio investments or P5 billion for trading portfolio investments.

The investment exceeded the IPG’s limit on free float market capitalization, with GSIS’ purchase representing 29.27 percent of Alternergy’s free float, exceeding the 10-percent cap for a single stock unless board approval was secured for a board seat, which was not the case here.

The transaction, the CoA report said, was executed without the necessary endorsement from the GSIS Assets and Liabilities Committee and Risk Oversight Committee, nor did it receive approval from the GSIS Board of Trustees, despite being just below the P1.5 billion threshold requiring such oversight.

The CoA suggested that this was tantamount to transaction splitting to evade board scrutiny.

The perpetual preferred shares were not listed on the Philippine Stock Exchange at the time of the agreement and payment, further violating GSIS investment policies.

The CoA’s 2023 audit report also highlighted a broader pattern of bypassing board approval as a systemic issue within GSIS, citing the Alternergy deal alongside other investments, such as those in DigiPlus Interactive and Nickel Asia, which resulted in a P251.37 million valuation loss.

The CoA directed GSIS to formulate a plan to recover those losses.

Wick’s argument that the allegations by the anonymous sources made them unsubstantiated and arbitrary falls apart with the CoA report.