Estrada profited from BW Resources' shares: Espiritu

Asian Economic News, Jan 15, 2001

MANILA, Jan. 11 Kyodo

Former Finance Secretary Edgardo Espiritu told an impeachment court Thursday that Philippine President Joseph Estrada owned shares in BW Resources Corp. and made a huge profit from selling them when the share price skyrocketed.

Espiritu testified that Estrada crony Dante Tan admitted to him that the president owned shares in BW Resources Corp., a gambling company at the center of the Philippines' worst stock-manipulation scandal.

Tan, BW Resources' major shareholder, was implicated in the price-fixing scandal involving the firm. Espiritu said Estrada is also Tan's ''partner.''

Espiritu was a staunch supporter of Estrada during the presidential campaign and was eventually appointed finance secretary. He resigned on Jan. 5 last year.

He stated that Estrada ''got excited'' when the price of BW Resources' shares rose, adding the president had told him he had made a lot of money from BW Resources.

''Ed, I am already raking in a huge profit from BW (shares),'' Espiritu quoted Estrada as telling him.

Espiritu took the witness stand to testify how BW Resources Corp. came into being, saying he tried to patch up the differences between Tan and another Estrada friend, Mark Jimenez, as to who would control the company.

Control over BW Resources' shares was eventually given to Tan who bought back the shares for 150 million pesos ($3 million) from Jimenez, Espiritu said.

He told the court the BW Resources controversy was one of the reasons he decided to resign from Estrada's cabinet.

He said he warned Estrada that ''the presidential friends'' would cause havoc to his administration and asked him to issue a statement concerning the BW price-fixing scandal.

Estrada, however, did not heed his suggestion, he said.

Prosecutors claim Estrada called Espiritu last December and tried to stop him from testifying in the impeachment court.

The country's worst-ever stock market scandal, which rocked the local stock exchange in 1999, caused BW Resource's share price to soar 50-fold before collapsing, wiping out the savings of hundreds of small investors.

Espiritu is the third prosecution witness to be called to testify that Estrada betrayed public trust and violated his own oath of office when he unduly intervened in the Securities and Exchange Commission on behalf of his crony Tan.

Earlier Jose Luis Yulo, former president of the Philippine Stock Exchange (PSE), and another officer, Ruben Almadro, also testified that Estrada exerted pressure on them to exonerate Tan.

Perfecto Yasay, former Securities and Exchange Commission chairman, will also be called to testify in the impeachment trial that began Dec. 7.

Last January Yasay told a Senate committee that Estrada had pressured him to exonerate Tan from the BW Resources probe.

He also accused Estrada of making a profit of 800 million pesos from the sale of shares in BW Resources Corp.

The feud between Estrada and Yasay came in the wake of Yasay's order to investigate the wild swings in the price of the company's stock in 1999.

Aside from betrayal of public trust, Estrada has also been impeached on charges of bribery, graft and corruption, and culpable violation of the Constitution.

The House of Representatives impeached him in November last year, making him the first Philippine leader to be impeached.

The impeachment was spawned by an accusation by Estrada's estranged drinking and gambling buddy Ilocos Gov. Luis Singson that he pocketed millions of pesos in kickbacks from illegal gambling and provincial tobacco excise tax.

Singson's claims rocked the country's financial markets, driving stocks and currency markets to new lows. It also plunged the country into a fresh political crisis.