“ (T)he bankruptcy court found Debtor ‘generally lacking credibility,’ and found he was ‘lying’ as to the undeclared companies.”
by Ducky Paredes
Passing himself off himself as a crackerjack power industry expertt, a certain David Celestra Tan has come up with yet another commentary in a major daily, this time on the supposed “3-legged tower”of sufficient, cheap and eco-friendly power crucial to what he calls a “wholistic and sustainable” energy development program.
A cursory reading of Tan’s latest dissection would show, however, that similar to previous pieces in the same broadsheet, this “think piece” on our energy sector is nothing but but another diatribe against Meralco.
“Power development is a 3-legged tower” is simply a barefaced attack on his chosen whipping boy—the Manila Electric Co. (Meralco)— based on his convoluted premise that electricity consumers in the Luzon grid continue to reel from Meralco ’s “monopolized self-dealing projects.”
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Tan is the founding president of the Philippine Independent Power Producers Association (PIPPA) and co-convener of consumer group Matuwid na Singil sa Kuryente Consumer Alliance Inc. (MSK). He and his organizations carry no weight whatsoeverin the power industry that knows about checkered past.
Tan has been embroiled in a number of court cases here and abroad for hoodwinking creditors of his energy-related ventures, ripping off employees in his companies, and over botched deals with local business partners Mid-Islands Power Corp. and the Oriental Mindoro Electric Cooperative Inc. (ORMECO).
Oriental Mindoro’s incumbent and former elective officials led by Reps. Rodolfo Valencia and Reynaldo Umali along with Gov. Alfonso Umali Jr. and Vice Gov. Humerlito Dolor unanimously oppose Power One’s application of its Electricity Supply Agreement (ESA) with ORMECO.
These Oriental Mindoro officials complain of irregularities in an eralier ESA to Power One.
Now, power industry leaders are also wondering over Tan’s inclusion in a newly created Task Force by the Department of Energy (DOE) to deal with the energy crisis, on the strength of his role as co-convenor of the MSK consumer group that has the look and smell of the nongovernment organizations (NGOs) of pork scam mastermind Janet Napoles.
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On June 17, 2010, the 7th Division of the Court of Appeals ordered Tan and his Power One Group of Companies (formerly Edison Industries Inc.) to award separation pay to nine (9) retrenched workers who earlier filed an illegal dismissal case against Tan’s firm before the NLRC.
There is also a case at the SC Second Division chaired by Senior Justice Antonio Carpio, in connection with Civil Case No. 70957-SJ that Mid-Islands Power filed against Power One and Tan on Sept. 11, 2006 over their power supply accord; as well as another one at the ERC over Case Nos. 2005-042 RC and 2008-023 RC pertaining to Power One’s deal with ORMECO.
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As regards his US cases, documents bare that these stem from the charge of “fraudlent intent” against Tan after the Philippine National Bank (PNB) won in September 1998 its case against Tan and Edison-Hubbard Corp. in the San Francisco Superior Court over a $6.999 million liability in connection with an unsettled bank loan.
The multimillion-dollar liability of Tan and Edison-Hubbard was the result of his guarantee of a PNB loan to Edison-Hubbard, which prompted the bank to conduct a debtor’s exam on Tan, during which he disclosed equity interest in five (5) corporations—Edison Global, Teledyne Marketing Corp. a.k.a. Powerline Equipment, Edison Mobile Hydraulics, Edison Industries a.k.a. Power One, and Filipinas Electric and Meter Co.
Edison Global is a Hong Kong firm while the others are Philippine corporations.
Following the US court ruling, PNB obtained an order assigning to it Tan’s disclosed interests until the liability was paid in full.
In a Chapter 7 petition (for bankruptcy) dated Feb. 11, 2000, Tan declared in his Schedules and Statement of Financial Affairs (SOFA) that he was officer or director and/or held at least a 5% stake in five companies.
It was discovered, however, that he failed to disclose his interest in seven (7) other companies, among them Stresscrete Pole Corp., Greenenergy Light Co. a.k.a. Edison Energy Corp., and Central Negros Power Corp.
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The American bankruptcy court ruled against Tan, prompting him to file an appeal before the US Bankruptcy Appellate Panel of the Ninth Circuit.
The appellate court affirmed the bankruptcy court’s decision against Tan and Edison-Hubbard, saying that “factual findings that Debtor intended to defraud his creditors and/or the trustee, and that his financial records were inadequate without sufficiet justification, were not clealry erroneous.”
It noted that the bankruptcy court found Debtor “generally lacking credibility,” and found he was “lying” as to the undeclared companies.
“These credibility determinations must be given deference,” it added. Further, given Debtor’s education, sophistication, and the size and complexity of his business, the explanations, even if true, would be insufficient….the demands of operating a business do not excuse the debtor from keeping basic financial records.”
Thus, why does Tan, who has a spotty record and who has been taken to task in American courts for trying to defraud his energy firms’ creditors, have the gall to pass himself off as an industry expert by coming out with supposed think pieces on the Philippine energy sector?
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A clue on where or how Tan’s bread is buttered is that in one of his previous “think pieces,” he had in shotgun fashion blasted specific Gencos and DUs as profiteers responsible for last December’s electricity price upsurge—with the exception of power generators such as those controlled by a certain goup.
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According to Meralco’s utility economics chief Larry Fernandez, not a single centavo of this month’s rate hike will go to Meralco because the increase is a result of higher government taxes; higher universal charge or lifeline subsidy for the missionary electrification program; and higher Genco charges resulting from tight supply, which, in turn, was triggered by the unscheduled shutdown of 20 power plants, mostly in Southern Luzon, that were affected or damaged by Typhoon Glenda.
If supposedly profit-hungry power firms like Meralco, according to Tan, thrive on blackout scenarios as they cash-in on shortfalls to rip off their customers, why would Meralco be pushing doable solutions to actually prevent a severe supply-demand gap from happening in the summer of 2015?
Clearly, Tan lacks the moral highground to judge our power industry players. In fact, energy sector leaders are alarmed over the inclusion of a shady character and his mon-operational consumer group in a top-caliber joint study group that Petilla created under Department Order No. 2014-05-0009 dated April 28 to study ways to pull down electricity prices.
This task force’s creation was an offshoot of the May 31, 2013 dialogue at the Heroes Hall in Malacañang in which—according to this DOE order— “labor groups proposed for the creation of a dedicated group, which will include the labor sector and consumers groups representatives, to monitor, discuss and resolve issues affecting the power supply and affordability of electricity in the country.”
The same DOE order recalled that this proposal for a more detailed study focused on power supply and pricing was reiterated during the Focus Group Discussions (FGD) and Consultative Dialogue that the DOE initiated during the February-March 2014 period on the review of the Electric Power Industry Reform Act (EPIRA).
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As shown by its organizational chart, the DOE’s multisectoral task force will be headed by Dr. Adoracion Navarro, a senior fellow at the Philippine Institute for Development Studies (PIDS), and will be represented in this study group by PIDS president Gilberto Llanto.
The task force force will inckude over 30 representatves from government, academe, business sectors and labor and consumer groups.
Task force members include Secretary Petilla and businessman Raul Concepcion of Gov’tWatch; plus representatives from the Joint Foreign Chambers (JFC), Philippine Chamber of Commerce and Industry (PCCI), Federation of Filipino Chinese Chamber of Commerce and Industry (FFCCCI), PIPPA, Meralco, National Consumers Affairs Council (NCAC), National Federation of Women’s Club of the Philippines (NFWCP), Coalition for Consumer Protection and Welfare Inc. (CCPW), Matuwid na Singil sa Kuryente Consumer Alliance Inc. (MSK), Alliance of Progressive Labor (APL) and NAGKAISA (United).
Why MSK is one of five consumer groups in this task force, given its questionable status as a non- functioning non-stock NGO, and why is Tan a task force member in his capacity as MSK chief, considering his unsavory background and his string of court cases in Manila and in the US ?
On its website, MSK describes its founders as electricity consumers who have “deep knowledge” of the industry’s privatization and deregulation, and whose goal is “to enlighten the public and policy makers on the specific rules and practices that have been causing the abusive power costs.”
However, two of MSK’s key officers—corporate secretary Lorna Asilo and treasurer Videt Ursula Cusi—certified under oath that this NGO “has not been in operation since its incorporation up to the present.” SEC records show that Asilo issued this Affidavit of Non-Operation on April 8, 2013, in lieu of an Auditor’s Report. She submitted this document to report that the NGO had total assets below P500,000 and annual gross receipts of less than P100,000.
Cusi issued her own Affidavit of Non-Operation attesting to this organization’s true status on May 23, 2013.
So why has Tan been blessed enough to be in the company of distinguished industry leaders in the task force as representative of a fledgling consumer group that is actually dormant, as attested to by its own key officers?
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hvp 08.19.14Readers who missed a column can access www.duckyparedes.com/blogs. This is updated daily. Your reactions are welcome at firstname.lastname@example.org or you can send me a message through Twitter @diretsahan.