COA says PCGG was lax in collecting dividends from crony stocks

MANILA, Philippines – State auditors scolded the Presidential Commission on Good Government (PCGG) for its “laxity in the monitoring and recovery efforts” of dividends due from stocks recovered from cronies of late dictator Ferdinand Marcos.

In a report released on Wednesday, June 8, The Commission on Audit (COA) said that out of the 269 recovered stock certificates (STCs) of some 925.5 million shares, the PCGG only received dividends from 13 STCs, or some 13.2 million shares from 1987 to 2004. 

COA emphasized that the PCGG had not received dividends from the STCs in question since 2005.

As of December 31, 2021, the dividends received by the PCGG totaled P1.86 billion from 1987 to 2004.

Moreover, since the PCGG failed to transfer the ownership of shares to the Philippine government, revenues may have gone to Marcos’ cronies. Dividends were likely not collected as the titles for the said shares were not transferred in the name of the Republic of the Philippines through the PCGG.

“The titles were not transferred to the government since 1986, hence, any returns for that matter may have been credited to the original registered owners to the disadvantage of the government,” COA said.

PCGG said it would “institute appropriate measures to monitor and ensure collection of dividends.”

It added that it would compel sequestered and surrendered corporations to account for how much dividends they should have been remitting.

Messy STC records

COA told PCGG to review its books after they found stock certificates it was in possession of but were not on records. 

It found that PCGG held STCs of the IRC Group of Companies surrendered by the late businessman Jose Yao Campos equivalent to 772.6 million shares worth P54.6 million.

COA also found that stocks surrendered by cronies of late dictator Ferdinand Marcos was worth more than the PCGG’s valuation.

PCGG pegged the value of some 505 million shares of 17 corporations at P906 million. Auditors found that there were only 63.8 million shares, but these were valued at over P1 billion. This meant a P338-million difference.

Meanwhile, COA recommended to PCGG to write off some P54.1 million worth of stock certificates, as these were from companies that have either ceased commercial operations or whose registrations were revoked.

Records still reflected the stocks of the following shuttered companies:

• Landoil Resources Corp. – stopped commercial operations in 1984
• Marinduque Mining and Industrial Corporation – ceased operations in 1999
• Earthcore Resources – revoked registration in 2003
• Philippine Oil and Geothermal Energy – revoked registration in 2003

Unrecorded art

COA also told PCGG’s Surrendered Assets Group of the Asset Management Department to review its inventory of 122 artworks that have remained off the books and have these pieces appraised again.

State auditors found: 

• 34 paintings
• 22 lithographs
• 18 wood carvings
• 13 collage works
• 10 jars
• Four ceramic potteries

Salcedo Auctions appraised the said artworks and pegged their value at P28.38 million while sequestered pieces were worth P315,000. 

The PCGG, however, said it already made an inventory of the mentioned artworks in July 2019. It also clarified that ownerships of at least nine paintings are being disputed in court and presently under litigation. – Rappler.com