Dennis Uy-led Udenna Corporation cried foul at claims surrounding its controversial acquisition of companies operating the Malampaya gas field, saying that these accusations are “destructive” to the company.
An emotional Udenna president Marty Escalona broke into tears on Thursday, November 18, as he defended the group from accusations.
“Most of the conglomerates, because of this pandemic, we do have a lot of challenges today, and accusations that are false or based on hearsay [are] very destructive to the group,” Escalona said.
Uy and Udenna have been in the spotlight as the Senate energy panel questioned the Department of Energy for approving the acquisition of Chevron shares. This investigation pushed a group of citizens to file a graft complaint against Uy and Energy Secretary Alfonso Cusi, among others.
Uy virtually has a 90% operating interest in the Malampaya gas-to-power project, after acquiring the stakes of Chevron and Shell. The remaining 10% is held by the Philippine National Oil Company-Exploration Corporation (PNOC-EC).
On Thursday, the Udenna president denied claims that the government stands to lose billions of pesos in potential income from the gas field.
According to Escalona, the bulk or over 60% of the government’s share in the endeavor is from the top line. In addition, PNOC-EC still gets 10% of net profits for having an operating interest.
“At the end of the day, the government enjoys 64% of revenues from Malampaya for doing nothing,” he said.
Escalona then challenged critics’ assumptions: If the government exercised its right to match, then it would have a larger role in the consortium. In effect, he said, the government’s revenues would have been subject to operational expenses.
“First of all, if they bid, they will stand to lose more because, now, instead of getting from gross revenues, now they are the consortium owners. They will be subjected to all those expenses now,” he said.
Escalona also noted that it was not only Udenna who expressed interest in Chevron and Shell.
“Suffice it to say that there are a lot of bidders and do you think Udenna, being the one with meager resources, [would] be able to coerce Shell and Chevron to make us the winner of the bid? These are international, credible corporates with [a] huge history of proper governance and compliance,” he said.
“Do you think Dennis can give Shell a call and say, ‘Please, can you give it to me?’ That will never happen.”
Udenna vs business groups
Udenna also took it personally when the Makati Business Club (MBC) and seven other business groups called for a deeper probe into the Malampaya deal.
While the MBC and the other groups did not name Uy or his businesses in their statement, the companies in question were his.
Uy wrote a letter to the MBC board, a copy of which was acquired by Rappler. In the letter, he expressed his concerns over the business groups’ statement and questioned why he had to learn about it in the media. Uy is a member of the MBC.
“I was under the assumption, if perhaps wrong or naive, that such is the reason we have a business club in the first place: that our members can have honest and frank conversations, without us having to argue or accuse each other in media or to call for investigations if such concerns raised by some members can be addressed through the good offices of the Makati Business Club,” Uy said in the letter.
Escalona on Thursday also took exception to statements of some members of the business community, whom he did not name. But his remarks appeared to be directed at the MBC and the other groups who believe that the government lost its opportunity to earn from Malampaya.
“Sadly, some of them I thought were friends of mine.”
Escalona also claimed the accusations are “really political.”
“Some people are trying to attack this administration and there’s not enough for them to attack this administration,” he said.
“They try to attack anyone who [is] perceived to be close to this administration. I think it’s unfair because we’re a collateral business.”
Escalona was part of Senator Grace Poe’s campaign when she launched her presidential bid in 2016. On Thursday, he described himself as “critical” of the Duterte administration.
“I was very critical and vocal about – and Dennis knows that I’m critical about, with all due respect, with the Duterte administration,” he said.
Why would Uy, a friend and campaign donor of the President, hire him?
“If that were a person who is truly political, why would he even consider me to join [Udenna]? His friends in politics, they say, ‘Pare, bakit naman ‘yan, eh kalaban natin ‘yan nung campaign natin?’ (Why hire him when he was on the opposing side during the campaign?)” Escalona said.
“Yet he did because Dennis is also a dedicated professional. So please take that to heart.”
In Escalona’s appeal, he asked the public to “really find out all of the facts and give them the courtesy of the benefit of the doubt.”
“It’s really unfair and it’s already affecting my and the group’s ability to be able to financially close pending transactions,” said Escalona. As he broke into tears, he added, “It’s also affecting the livelihood of thousands of our employees.”
Analysts have stressed the importance of scrutinizing the Malampaya transactions, saying that the impact of such deals would go beyond the energy industry, especially with Uy’s ties to Duterte. – Rappler.com