Ongpin vs Ashmore: The real deal

Lala Rimando
It seems the criminal case is a secondary issue in the Ongpin-Ashmore saga. The core is money.

PARTING OF WAYS. Billionaire Roberto Ongpin parts ways with Ashmore. Photo by Lala Rimando

MANILA, Philippines – Billionaire Roberto “Bobby” Ongpin is all geared up for another fight. The former ally of strongman Ferdinand Marcos is clawing and roaring, as he almost always does when he is fully engaged in battles he is confident he can win.

How the 74-year-old maverick thinks he could defeat one of London’s richest hedge funds makes an interesting study of a man in a position of power and influence. (READ: Ongpin group sues Ashmore execs over simulated share sale)

Slapping legal issues against Ashmore Group is one of the most public and international controversies so far for Ongpin, one of the world’s richest. He is claiming that Ashmore executives committed crime when they violated Philippine laws in an equity deal for luxury property developer Alphaland Corporation, one of the two erstwhile partners’ investments.

Going against a foreign foe now seemed a calculated move, despite it being driven partly by looming business deadlines of Alphaland projects. Having survived the fall of the Marcoses in the 80s and having rebounded from political adversity come in handy now.

His deal-making powers have been both lauded and feared. Known in his circle of global billionaires as the one who “sees and seizes opportunities,” deals under his belt include those with Robert Kuok of the Shangri-la hotel chain and Hank Greenberg of the AIG, the defunct insurance giant. Most have been under the radar until Ashmore became a partner in 2005.

After 7 years and about $2-billion Philippine deals after, Ongpin and Ashmore have turned from partners to rivals. “It is a bitter one,” he told me in an interview last week, describing the feud that started brewing about two years ago. (READ: Confirmed: Ongpin, Ashmore to part ways)

Not his equal

Two years ago, he was being investigated by a Senate committee led by Senator Serge Osmeña on the controversial P660-million loan Ongpin-led companies took out from state-owned Development Bank of the Philippines (DBP).

The loan partly financed an intricate deal that involved the purchase of Philex Mining shares, including those owned by DBP. In a classic buy-and-sell maneuver, Ongpin later turned around and sold those shares at a fat profit to the group of businessman Manuel V. Pangilinan.

The Senate probe eventually led to a graft case at the Ombudsman, dragging his loyal friends and business associates. The anti-money laundering council later froze his bank accounts in December 2012, triggering Ongpin to file cases against the council members whom he also relentlessly attacked in the media.

The freeze order was lifted only in mid-2013.

Although Ashmore was not involved in the DBP-Philex deal, it was dragged into the scandal. Questions were raised in the UK regarding Ashmore’s partnership with the controversial Filipino and how it could potentially hurt minority investors.

Ashmore, on the other hand, went through changes at the top. His original friends, Seumas James Dawes and Patrick Mahony who used to call the shots, have already retired. Ongpin has not been happy with the new guys, especially when his business was relegated to the care of some of Ashmore’s executives he considers “too young,” “arrogant,” and not his equal.

‘Fake’ sale

Aside from the personality differences, their clashes were sparked by fundamental differences in doing business.

For example, Ongpin said the Ashmore executives wanted to sell a residential skyscraper project already; Ongpin preferred to wait some more and continue pouring in funds to build value. Ongpin also confirmed previous rumors that the Ashmore executives wanted to boot him out of his office-with-a-view at the Alphaland Southgate Tower on EDSA following talks on a property-equity exchange. Ashmore was to own the strategically located Southgate building but negotiations fell through.

One of those “young” Ashmore executives, Thomas Donnelly, is among the two that Ongpin-led Alphaland has filed a complaint against before the Philippine Securities and Exchange Commission for allegedly “misrepresenting” a Dec 31, 2012 equity deal. 

Ashmore’s Singapore unit sold Alphaland shares to Credit Suisse Singapore, paving the way for Alphaland to meet the 10% minimum public float required of local firms to stay listed at the exchange.

Ongpin said Donnelly claimed that Ashmore remained the “beneficial owner” of those shares sold to Credit Suisse in documents given to investors keen on buying Ashmore’s stake in Alphaland. Those investors, who are also Ongpin’s friends, showed him those stack of documents as they were mulling the deal.

Donnelly reportedly said the 2.5% stake sold to Credit Suisse in 2012 was still part of Ashmore’s 69% total stake in Alphaland in 2013. Ashmore has denied the allegation. 

Aside from Donnelly, the other Ashmore executive in hot water is Alexandra Autrey who signed Ashmore’s disclosure to the Philippine Stock Exchange (PSE) regarding the equity deal. When I asked a corporate lawyer why Ongpin group didn’t move to have Ashmore sanctioned, he explained that Philippine laws only cover the officers of a foreign firm involved in questionable transactions, including disclosures filed here.

Shut out of credit lines

Ongpin said the Alphaland board learned about this “miserpresentation” in the last quarter of 2013. This brings the issue of timing: Why file legal cases against Ashmore just this January?

It seems the criminal case is a secondary issue. The core is money.

Fresh cash or access to credit is crucial to keep Alphaland’s luxury projects going. The capital-intensive expansion or construction projects include Alphaland’s flagship island resort in the Pacific, Balesin, which features themed villas. Alphaland Makati Place, which sells spacious and furnished 1- to 3-bedroom units worth up to P27 million each, has completed its premium-members-only The City Club but has 3 more towers to complete.

The ambitious Marina Club in Manila Bay targeting yacht enthusiasts and a polo-field-slash-beach-resort near tourist haven Boracay island are on hold. It has yet to clinch a buyer for the now-complete 34-storey Alphaland Tower along Ayala Avenue after Pangilinan’s group decided not buy it.

There are also land banks ripe for development, including the almost 70-hectare property in Itogon, Benguet, where Ongpin plans to build a complex of log homes and recreational facilities. He wants it grander than Tagaytay Highlands where his former partners kicked him out over a decade ago. (A mining asset of Atok Big Wedge owned by Ongpin and Ashmore is also located in Itogon.)

Ongpin confirmed a report that local banks have shut him out of his credit lines following the mid-2013 pronouncements of Ashmore that it wants out. The report, citing Alphaland’s submissions to the SEC, said that Alphaland was facing a cash deficit of almost P180 million this January.

“In view of the company’s inability to borrow from the local banking community, in a few weeks’ time the company will be unable to pay its suppliers, creditors and even its employees,” Alphaland’s SEC disclosure said.

Alphaland has had funding difficulties since 2013, but to get by, Ongpin said he put in his own money (about P1.5 billion) and added in the Itogon property to the corporate asset portfolio, likely to be used for mortgage needs. Just like any property developers, Alphaland is asset-rich and its debts current, he insisted. He said he has been keen on Ashmore’s exit so new partners who could pour in cash could come in.

In November, Alphaland disclosed that the Abu Dhabi ruling family was among the investors keen on buying Ashmore out. Ongpin, who was banking on his friendship with the sheik for a better business relationship, was irked that Ashmore snubbed the Abu Dhabi investor’s $400-million offer.

Ongpin’s maneuver

With no incoming fresh funds and the threat of being locked out of its credit lines, Ongpin led the following maneuver: in a January 2 board meeting, a capital call was issued. It served two purposes: raise some funds and dilute Ashmore’s majority shareholdings.

Ashmore immediately asked the Makati regional trial court for a temporary restraining order. At stake is its official 40% shareholdings in Alphaland (that turned out to actually be as high as 69.4% based on recent disclosures). Ashmore cited a shareholder agreement Ongpin and other Alphaland executives have signed in the past that required, among others, the nod of Ashmore in any of Alphaland’s fund raising schemes (which include a capital call).

Ongpin admitted signing the shareholder agreement “many years ago” when he was still dealing with Ashmore’s Dawes. “We were friends,” he said, stressing the context of that document. But he insisted he never saw the final draft, waited for a copy for 3 years, and was surprised when the new and younger Ashmore executives pulled it out during a heated exchange in 2013.

He said the shareholder agreement violated Philippine laws, which prohibit foreigners from asserting management and financial control over local firms.

The court ruled in favor of Alphaland, which had countered that the agreement is void and was not fully executed. That paved the way for the Ongpin group to increase its stake to 50.7% and increase its board seats to 13. Ashmore didn’t participate in the capital call so its stake was whittled down to 24% and only two board seats. 

What now?

Ongpin said the capital call raised only some of the funds they need. Clipping Ashmore’s clout in Alphaland mattered more. It will not be surprising if Alphaland announces another moneyed partner soon.

Against this backdrop, it seems the criminal complaint against the Ashmore executives is gravy. Ongpin said it must be done to show to the regulators the group’s “good faith.”

But more than that, it is likely meant to send a stern message to London-listed Ashmore. The Alphaland complaint was also sent to the Financial Conduct Authority of London, which regulates and has the power to investigate dubious transactions of British financial firms.

What sweet revenge for Ongpin whose troubles with Philippine authorities haunted him all the way to Europe where he regularly goes for business and leisure. London broadsheets had written about his frozen accounts and the Senate investigation.

Trading of Alphaland is currently suspended as the stock exchange officials mull next steps following the allegation of a fake sale. Former Philippine Stock Exchange president Francis Lim is part of Ongpin’s legal team.

Backed by brilliant lawyers and favored by the courts, Ongpin is fighting a foe in his own turf and terms. –

Lala Rimando is former business editor of Rappler. She has written in-depth reports on Filipino oligarchs, how political economy in the Philippines works, and business sustainability issues. Check her blog at