Senator Roxas: SEC guilty of willful negligence, incompetence

Liberal President Senator Mar Roxas yesterday chided officials of the Securities and Exchange Commission (SEC) for their "willful negligence" and incompetence in protecting the interests of pre-need plan holders and investors during a hearing conducted by the Senate on the state of the pre-need industry.
"The weakest charge against the SEC is that it has been negligent. That's the kindest assessment. They have been negligent, lazy and passive. 'Yan ang pinakamagaan. Pero dahil hindi ito ang pinaka-unang pangyayari na ganito, masasabi that the SEC was not only negligent but they have been willfully aiding and abetting the defrauding of the people by turning a blind eye, by willfully ignoring all of these signals or signs that they should have been stricter," the chairman of the committee said.
He noted the statement of SEC Chairperson Fe Barin that while the Commission made sure that the interests of the pre-need plan holders were protected, it likewise tried to balance the concerns of the pre-need companies.

She likewise blamed supposed restrictions in the SEC Charter, which she said tied them down in stopping the financial problems of the industry.
"I am really saddened by your response. Talagang nalulungkot ako. Naghuhugas kayo ng kamay. Umiiwas kayo sa responsibilidad. Kayo ang chairperson ng SEC. Sumulat na kami ng batas, iyong Pre Need Code, naipasa na ito sa Senado pero hindi pa na-a-aksyunan sa Kamara. Pero hindi ito excuse para sa ginawa ninyo. The SEC has been given the widest latitude to regulate this. Kung nung 2005 nakita na ninyo ang problema, at na-analyze na ninyo ang problema, maaaring nagpatigil na kayo ng pagbebenta ng mga plans pero tuloy-tuloy ang ligaya kaya ngayon meron na namang ganito," Roxas reprimanded Barin.

"Hindi ito ang unang pangyayari na ganito, nagkaron na tayo ng CAP, ng PEP, ng maraming kumpanya na preneed na pare-pareho ang nangyayari. Masasabi na natin na captured na sila (SEC), may sabwatan na sila. Hindi na nila nakikita ang mga interests ng planholders," he added.
Roxas also chided Director Jose Aquino of the SEC's Non-Traditional Securities and Instruments Department for failing to protect the public's interest in the cased of Legacy Consolidated Inc., owned by businessman Celso delos Angeles, when it had reported its woes already three years ago.

Aquino told senators he "met with (Legacy shareholders) and gave them directives" but admitted that only "some" of these directives were complied with by Legacy Consolidated.

Delos Angeles said his company continued to sell pre-need plans until November 2008, and shortly thereafter, in December 2 last year, applied with the SEC for corporate dissolution, claiming that the company has become insolvent.
"Nagsabi na nga sila na nagkaka-problema na sila pero pinayagan niyo pa rin silang magbenta ng mga plans. You, SEC, you're supposed to be the bantay of the interest ng lahat ng magulang na namili nitong Legacy na ito. Tapos matutuklasan natin na nalaman niyo ito 3 years ago pero wala kayong ginawa kundi sumulat, mag-miting o kaya mag-direct. Pero toothless, fangless, walang ngipin kasi tuloy ang ligaya. Hanggang first week of December na sabi ni Mr. Delos Angeles, hindi na namin kaya ito. Kasi yung mga bangko na pag-aari din niya, bangkarote na din. Ito din ang pinag-invest-an ng mga trustee na ito," Roxas said.

"Malinaw na malinaw na hindi lamang malambot, hindi lamang katamaran, hindi lamang incompetence, pero mukhang willful negligence na talaga. Talagang nagtatakip mata sila, talagang tinitingnan ang side ng kumpaya laban sa side ng mga preneed plan holders," he stressed.

He added: "Parang lagi na lang silang nabubulaga, lagi na lang silang naiiwan sa kangkungan. Dahil hindi nila talaga alam ang trabaho nila. O kaya, dahil hindi ito ang kauna-unahang pangyayaring ito, talagang nagtatakip mata sila, nagpapa-inosente sila kasi ayaw nilang disiplinahin, ayaw nilang proteksyunan ang interest ng mga planholders dahil ang proteksyon na kailangan ng planholders ang siyang sasagabal o magpapahigpit sa mga operasyon ng mga kumpanyang ito."
Asked what charges could be filed against SEC officials, Roxas said they could be slapped with negligence, dereliction of duty and violation of the Anti-Graft and Corrupt Practices Act.

The Senate committees on trade and commerce and banks will resume hearings on the pre-need industry's financial woes next week.



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