PhilWeb reveals 'main reason' behind Ongpin resignation
MANILA, Philippines – The president of PhilWeb Corporation has revealed the main reason why Roberto Ongpin resigned: to save the company from possible shutdown.
"The main reason why Mr. Ongpin resigned from PhilWeb is to save the company. He recognized that if he stayed on, PhilWeb's e-Games outlets could be shut down, which would lead to the loss of its business and eventual closure, affecting more than 5,000 employees," PhilWeb president Dennis Valdes said in a statement on Sunday, August 7.
Last week, Ongpin resigned from his post as chairman of PhilWeb, saying he needs "to focus on real estate projects of Alphaland Corporation."
His resignation came a day after President Rodrigo Duterte publicly threatened to "destroy" him and other "oligarchs."
But Valdes said focusing on Alphaland projects is not the main reason.
The PhilWeb president said Ongpin took into consideration "enormous long-term economic and financial" factors when he quit the listed firm. (READ: Ongpin's PhilWeb seeks 3-day trading suspension)
Following the steps of her father, Anna Bettina Ongpin also quit as PhilWeb vice-chairperson and director.
In the past few weeks, PhilWeb has been suffering from poor investor sentiment.
A day after Duterte tagged Ongpin as one of the "oligarchs" he wants to "destroy," PhilWeb shares plunged by 36.88% to end at P8.95 each, their lowest level on the local bourse.
What is PhilWeb?
For the past 14 years, PhilWeb has been listed on the Philippine Stock Exchange. It is also a service provider to the Philippine Amusement and Gaming Corporation (PAGCOR) in the management of its e-Games network.
During this period, PhilWeb remitted over P14 billion to PAGCOR.
"PAGCOR e-Games is not online gaming," Valdes said.
He added that it cannot be accessed by an office or home computer.
"It is a private, members-only network of clubs where players need to be physically present in order to play. Access to these clubs is strictly controlled such that it is only open to members who are over 21 years old and are financially capable of gaming," Valdes added.
To date, PhilWeb said it controls 286 outlets, with over 5,000 employees.
What is at stake?
Should its contract with PAGCOR be cancelled or not renewed, Valdes said the government-owned and -controlled corporation "would not receive [its] average P6 million per day [revenue share]."
"This revenue, estimated at over P2.1 billion annually, comes at no cost to PAGCOR," the PhilWeb president said.
Also expected to be affected are over 1,500 stockholders who own shares in PhilWeb.
These stockholders include foreign funds, Valdes said.
He pointed out that "the sudden closure of a publicly listed company may cause serious concerns to foreign investors."
According to Valdes, the government would also lose out with PhilWeb’s possible closure.
The Bureau of Internal Revenue would "not receive over P280 million annually, which represents the company's corporate income tax, VAT, and other taxes."
PhilWeb's license agreement with PAGCOR is set to expire on August 10. – Rappler.com