Philippine SEC Replaces Head of Stock-Rigging Probe
Manila, July 13 (Bloomberg) -- The Philippines Securities and Exchange Commission replaced its top investigator and seized her files after she questioned key evidence in a nine-month probe of BW Resources Corp., a move that clears the way for the SEC to file its first insider-trading charges in its 64-year history.
SEC Chairwoman Lilia Bautista and three other commissioners reassigned prosecution chief Elizabeth Martin to another unit, according to an order obtained by Bloomberg News. Martin was told to turn over all pending work to SEC lawyer Eligio Almojera, who was named acting head of the Prosecution and Enforcement Department.
The move came less than a week after Martin called evidence in the nation's biggest stock scandal, in which the small gaming company shot up 5,000 percent, ``weak.'' The SEC is keen to punish the 38 people and eight brokerages it says were to blame, in order to reassure investors it's serious about cleaning up corruption in one of the world's worst-performing stock markets.
Bautista defended her decision to move Martin aside. ``We should have somebody there who believes in the case,'' she said in an interview. Martin took a 30-day leave of absence and couldn't be reached for comment.
Some investors said regulators have a long way to go to restore confidence after charges and countercharges swirling around the BW case, coupled with laggard economic growth and an escalating conflict with Muslim rebels, pushed the key stock index down by more than a third last year.
``It'll be quite some time before confidence creeps back in,'' said Aaron Pong, a director at RBC Investment Management (Asia) Ltd. in Hong Kong, which oversees $200 million in Asian stocks.
Tuesday Deadline
Bautista said a final report on the case will be filed by Tuesday, more than a week after the initial deadline.
In the meantime, all documents pertaining to the case have been locked up to forestall the possibility of evidence being lost.
Two people -- Eduardo C. Lim Sr., the father of former BW Resources President Eduardo Lim Jr., and Ramon Lee, an associate of BW Resources shareholder Dante Tan -- were dropped from the complaint because documents linking them to possible wrongdoing were thought to be missing. Those documents were later found, and they were restored to the list.
``All the documents are intact in the locker room of my room,'' Bautista said. ``Only two people are allowed, so there's no possibility of missing documents.''
She also put in a good word for Almojera, an SEC lawyer for the past 19 years, saying he has ``well-rounded experience'' and is ``very familiar'' with the BW case.
Credibility
Replacing the SEC's chief investigator could also end up further delaying the BW case. The investigation began back in October and cost the job of former SEC Chief Perfecto Yasay, who stepped down in March after disclosing that President Joseph Estrada asked him to halt an investigation into tycoon Dante Tan, an old presidential friend and principal shareholder in BW Resources.
``It weakens the case because you will have someone new who will start all over again and have to try to counter what Martin has said,'' Yasay said.
The Philippine Stock Exchange began an investigation into BW Resources last October, after the company's share price spiked, then tumbled, in a matter of weeks. It took until February for the exchange to submit a report to the SEC, which took another two months to send its own report to the Justice Department.
Martin's departure should allow the SEC to finally close the door on a scandal that has cost the Philippines Stock Market much of its credibility, some investors said.
``At the end of the day, if there are indeed persons who are guilty, they should prosecute,'' said Efren Cruz, who helps manage 290 million pesos ($6.5 million) at the Kabuhayan Fund in Manila. ``That's all investors want to see, that there's actually teeth at the SEC.''
Jul/13/2000 6:12 ET
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