First of 2 parts

AT A GLANCE:

• A boardroom squabble at Okada Manila has dragged House Speaker Martin Romualdez over supposed bribery, showing that people with vested interests have considered using his ties for economic gain
• Romualdez’s little-known and dormant businesses have been showing signs of activity as his cousin, Ferdinand Marcos Jr., rose to the presidency
• Romualdez has supported legislation that benefits his business interests
  

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MANILA, Philippines – When board members of Okada Manila hit a legal obstacle as to who should control the $3-billion casino resort, one of the opposing sides resorted to approaching people who knew a powerful politician.

Court documents revealed that they allegedly attempted to influence the courts through House Speaker Martin Romualdez, first cousin of President Ferdinand Marcos Jr. and nephew of former first lady Imelda Romualdez Marcos.

Here’s a summary of the Okada Manila fiasco:

• In 2017, Japanese pachinko tycoon Kazuo Okada was booted out of the casino named after him by no less than his wife and son over supposed misuse of company funds. Kazuo was replaced by retired justice Manuel Lazaro as board chairman. Lazaro was a former justice of the Court of Appeals and presidential assistant for legal affairs. Lazaro was also one of the most trusted men of former president and dictator Ferdinand E. Marcos. Lazaro died in May 2022.
• While Kazuo was out of the company, casino officials searched for more capital, resulting in talks with a US-based blank check company called 26 Capital in 2021, which then resulted in plans to make the casino public at the Nasdaq. 
• In a dramatic turn of events and after legal maneuvers, Kazuo was reinstated in the board in 2021 through a Supreme Court order. He then installed his own board of directors and removed the current ones in what was dubbed a hostile takeover.
• But the Philippine Amusement and Gaming Corporation, through a legal opinion issued by the Department of Justice, reinstated the ousted board, but allowed Okada to stay.
• 26 Capital, the US-based company that wanted to merge with Okada Manila, was effectively left hanging amid the fiasco, even though the board they supported got their posts back. Merger talks eventually fell through. 26 Capital sued Okada Manila for the failed merger.

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It was 26 Capital that accused the Okada Manila board of reaching out to Romualdez.

In a filing at a Delaware Chancery Court which specifically handles corporate disputes, 26 Capital presented screenshots of emails, showing alleged exchanges of how the Okada Manila board tapped Romualdez to get their posts back. (READ: Kazuo Okada faces possible casino name change, Nasdaq IPO hurdles)

In the emails, the officials referred to Romualdez as “Number 2” and the “common friend.” 

The House Speaker was supposedly given “heavy luggage” with “an item.” When the Japanese officials supposedly met Romualdez, the House Speaker allegedly called up court officials “then and there” to intervene.

When this information was given to the press in early August, Rappler investigated the matter and interviewed former high-ranking Okada Manila executives. An official told Rappler what was inside the luggage, as well as more details about Romualdez’s involvement that allegedly involved a total of P3 billion. The former Japanese Okada Manila official, however, could not substantiate the claims with documents, other than citing what was revealed during the trial. Rappler decided not to run the story based on the statements made by the reliable source and continued to probe.

But in September 2023 or just weeks after court documents were given to the press, the US court swiftly ruled that the merger should not push through. Ruling otherwise would breach Philippine laws. And even if they did rule in favor of 26 Capital, enforcement remained outside its jurisdiction.

“When parties are domiciled or have significant assets in the United States, this court can pick from a menu of sanctions. No one has identified any sanction that could be deployed effectively in the Philippines,” the decision read.

The decision, however, recognized that Okada Manila officials engaged in some form of a “dodgy bargain” with Philippine officials to get reinstated, even emphasizing that 26 Capital was aware of the deal to regain control of the casino. The court added that “both sides behaved badly.”

“When traditional avenues failed, they resorted to a dodgy bargain, in which they offered substantial personal benefits to powerful figures in return for ex parte efforts to influence the justices.”

In the same decision, however, the US court emphasized that Philippine justice officials did not “play ball” with Okada Manila executives that supposedly engaged in dodgy business deals.

Romualdez was silent on the issue for months and did not respond to Rappler’s repeated requests for comment, up until a rare press briefing on October 8, where he cleared his name.

“I have always upheld the principles of transparency, integrity, and honesty in my public service. These allegations are baseless and are a clear attempt to tarnish my reputation,” Romualdez said.

“It’s essential for the public to know that the legal case in question had already been decided in the casino’s favor, and this decision was reached purely on its merits, without any external influence or prejudice.”

But on Tuesday, November 28, a Supreme Court (SC) decision was made public that effectively removed Kazuo Okada from his namesake casino.

The incident puts a harsh spotlight on Romualdez’s powerful position under a Marcos presidency, and how people with business and political interests would attempt to cozy up to him for their gain. 

After all, he too has business interests, ranging from infrastructure, banking, media, and mining. 

His companies were described by stock market participants as dormant, but have been showing more activity compared to previous years. 

From giving surprise dividends to shareholders, tidying up financial records, to substantial deals, what’s next for Romualdez’s companies?

Rappler has kept track of these reported developments.

RYM Business Management

A little-known private holding company called RYM Business Management has been one of the most active movers, securing deals in construction, banking, and media.

Informed sources told Rappler that RYM refers to the initials of Romualdez’s wife, Yedda Marie. RYM’s registration documents, however, do not show the names of the House Speaker or his wife. Romualdez, however, has not refuted the many reports linking him and his wife to RYM. (READ: The power of Yedda Romualdez, Lady of the House and wife of the Speaker)

Rappler contacted Romualdez’s media relations staff for comment, and to get a response about ownership of RYM. They have acknowledged our requests made on November 28 and December 1, 4, and 6, but were told that they are still awaiting Romualdez’s response. We have followed up several times and will update this story once we do get a reply.

RYM lists Remegio Dayandayan Jr. as its president and chairman. He sits in other Romualdez-linked companies as director.

Infrastructure. In April, RYM struck a deal to buy 20% of EEI, a publicly-listed construction company of the Yuchengco family’s House of Investments. The deal was worth P1.25 billion.

EEI, the Yuchengcos, and the Romualdezes go way back. 

In the 1950s, EEI’s predecessor, Engineering Equipment and Supply Company (EESCO), was acquired by Benguet Corporation, the leading gold producer at that time. 

The Romualdez clan, through Martin’s father, the late Benjamin “Kokoy” Romualdez, would acquire majority stake in Benguet Corporation during the Marcos dictatorship in the 1960s and 1970s.

In the 1990s, the Yuchengco group acquired Benguet Corporation’s stake in EEI.

The Yuchengcos described RYM as a “strategic partner.”

Banking. RYM also ventured into the banking sector by infusing P1.8 billion into the Philippine Veterans Bank (PVB), boosting the bank’s equity to over P5 billion. This was announced during the special stockholders’ meeting last March. 

RYM’s investment comes as the bank ramps up its capital base amid tight competition in the banking space. Its new charter now allows an increase of its authorized capital to P10 billion. The bank has likewise offered shares to military personnel and veteran descendants to reach this capitalization.

Lawmakers who proposed the law amending the bank's charter included Romualdez and his wife.

“We will never be looked upon anymore as a minor bank or a saling pusa or a bank that can’t meet the needs of supporting the veteran community,” PVB CEO Roberto de Ocampo told shareholders. 

Prime Media and ABS-CBN

Perhaps the most prominent deal of RYM was through its subsidiary, Prime Media Holdings Incorporated, and Lopez-owned news and entertainment firm ABS-CBN.

The two formed a joint venture company – Media Serbisyo Production Corporation – with an initial capital of P100 million with Prime Media having the controlling 51% stake. The deal came after ABS-CBN announced the closure of its news channel TeleRadyo due to financial losses. 

The deal gave birth to a new radio station, DWPM Radyo 630, which signaled ABS-CBN’s return to free radio, more than three years after it lost its free-to-air channels. In the arrangement, ABS-CBN provides the content, while Prime Media controls the broadcasting.

ABS-CBN entered into the deal after suffering a shutdown and non-renewal of franchise during the Duterte administration and the height of the pandemic in 2020. Romualdez, who was the House majority floor leader at that time, and wife, Tingog Party Representative Yedda Marie, were among the 70 members who voted against the franchise renewal.

Prior to this deal, Prime Media was just a holding company with “very minimal operations,” and at one point retired all its employees in 2010. It only got reinvigorated when Romualdez’s company, Philippine Collective Media Corporation (PCMC), conducted a backdoor listing through a share swap.

In its latest disclosure, it seems that it is preparing for more funds to come. For its upcoming annual stockholders’ meeting on December 5, the company is seeking a series of amendments, including an increase of its authorized capital stock to P7 billion and conversion of preferred shares into common shares. 

Analysts who requested anonymity told Rappler that these moves indicate that the company is “cleaning up the cap table” to remove ambiguity or confusion on ownership, effectively eliminating “toxic” convertible notes or investments. The increase in capitalization seems to also point to the company expecting funds “soon.”

Other media interests

Romualdez’s broadcast venture started in 2008 after Congress granted his company a franchise to establish radio and TV stations in his home region, Eastern Visayas. These stations carry the FMR (Favorite Music Radio) brand, which are also the initials of his full name, Ferdinand Martin Romualdez.

Since then, broadcast reach has reached nationwide levels.

Romualdez also has interests in print media. His family currently controls the Journal Group of Publications. He also bought national broadsheet Manila Standard from port tycoon Enrique Razon for around P100 million in 2010.

“I just realized that the newspaper business is not a growing business. I’d rather focus on an industry that is growing,” Razon said in an article by the Philippine Star. 

Manila Standard’s chairman/president/CEO is Rolando G. Estabillo, a former vice president for corporate communications of flag carrier Philippine Airlines (PAL).

Martin's brother, Philip, is married to Sandy Prieto Romualdez, who serves as CEO of the Inquirer Group of Companies.

While business interests in media and stakes in various companies already show the prominence and influence of Romualdez and his family, their interests in mining provide a solid financial base.

With mining as the family’s crown jewel, will their interests shape upcoming policies? – Rappler.com

NEXT: Part 2 | Martin Romualdez and his mining interests