/ stevenwarran's Library/ Notes/ January 12, 2001, Sun Star, President 'admitted he made money from BW',
January 12, 2001, Sun Star, President 'admitted he made money from BW',
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MANILA -- President Estrada admitted making huge sums of money through a business friend later indicted for insider trading, a former cabinet official told the impeachment court Thursday.
Edgardo Espiritu, a former finance secretary, testified that Estrada told him the money came from his partnership with Dante Tan, the controversial founder of gaming firm BW Resources Corp.
As President, Estrada is barred from indulging in any business activity, as it would amount to conflict of interest.
Before Espiritu took the witness stand, former Philippine Stock Exchange (PSE) president Jose Luis Yulo was asked by two senator-judges on the four telephone calls President Estrada allegedly made to him.
Senator-Judges Tessie Aquino-Oreta and Juan Ponce Enrile, on separate occasions, pointed out that the President merely instructed Yulo to "expedite" investigation on Tan in relation to allegations of insider trading of BW shares.
Yulo quoted Estrada as saying: "Tapusin na natin. Ikaw na ang bahala." (Let's finish this. You take care of it.)
The PSE official said he had interpreted the President's instruction that he should clear Tan of the allegations.
Asked by one senator-judge to rate Estrada as a candidate chief executive officer, former Yulo said: "I don't think I'd make him our CEO." Estrada, he explained, allowed his friends to run riot and nearly sink the company.
Regulators have said BW shares' yoyo- like ride in late 1999 led to the near collapse of the PSE in the biggest insider trading scandal in the country's history.
A judicial inquiry later led to the indictment of Tan and three others for securities fraud, a crime punishable by up to 21 years in jail.
While thousands of investors lost money in the share fiasco, Espiritu said he was dumbstruck by Estrada's revelation during a meeting in Malacañang while discussing the fallout of the stock crash on the economy.
"In the excitement of the President with regard to the upsurge of BW shares, he told me in Tagalog, 'Ed, I have already made a lot of money from BW shares," Espiritu told the impeachment tribunal hearing graft and other charges against Estrada.
This came to him as a shock because this confirmed Tan's allegations that he and the President were partners in the BW Resources. He had earlier refused to believe Tan's contention.
The prosecution then pointed out that Estrada did not only intervene to protect Tan but also to protect his own shares of stocks in BW.
Espiritu also claimed that Estrada pressured the Philippine National Bank into granting the BW Resources a P600-million loan despite the lack of collateral.
In an immediate reaction, Estrada's spokesman Ernesto Maceda said Espiritu's testimony was fabricated.
"Ed Espiritu is the prosecution's last card but I'm afraid it's not enough because his stories were fully invented and imagined," Maceda told reporters, adding the President watched the trial proceedings on television.
Espiritu did not say when his meeting with Estrada took place, nor the value of the stock windfall.
The head of the PSE's fraud surveillance unit at the time, Ruben Almadro, testified Tuesday that Tan earned P820 million from the trades in June 1999.
The stock peaked at P107 in October 1999 from about P2 at the start of that year, and plunged steeply thereafter, allegedly due to manipulation by Tan with the collusion of brokers.
The stock closed Thursday at 70 centavos, just below its book value.
Espiritu said he had met with Tan about the volatile stock price and later called on Estrada to discuss ways to resolve the huge unsettled trades generated by the investor frenzy on the BW shares.
At the meeting, Tan "admitted to me that President Estrada was his partner in BW Resources," said Espiritu, who quit his post a year ago after heading Estrada's team of economic advisers.
He said he emerged "discouraged" from the meeting with Estrada because "he did not issue a single instruction with regard to this problem," even as the stock exchange was saddled with P1.8 billion in unsettled trades.
Instead, he said Estrada told him: "Dante Tan is just a victim here. In fact we lost money here." He added that he could not believe that Estrada was more concerned about his stakes at BW rather on the possible collapse of the PSE.
Espiritu, a former banker, said he had submitted a letter to Estrada complaining about the damage wrought by presidential friends on the economy, as well as corruption in government.
He said he urged Estrada to formally order regulators and the exchange to release the report of their inquiries into the insider trading case in 30 days.
But Espiritu said the President told him that the corruption occurred in the finance department and that "you are just sour-graping." Espiritu was the first among Estrada's former or present senior circle of advisers to testify at the month-old trial.
He also told the court that Estrada also called on him, before he left for Los Angeles to spend the holidays there last year, asking him not to testify in the trial.
Yasay's testimony, on the other hand, was cut short as the hearing was suspended for the day.
He was asked about the President's alleged meddling in concerns of the SEC but with the defense's objection, Yasay's testimony was limited.
The impeachment court, though, is yet to rule on the defense's motion against some of the issues that the prosecution hopes to raise against Estrada through Yasay's testimony.
To support the claim that the President had made attempts to intervene in favor of Tan in relation to the insider trading case, the prosecution presented Emeterio Perez, business editor of Daily Tribune, as a witness.
Perez, former assistant business editor of Manila Times, testified that on Nov. 19, 1999 he was in Yasay's office when Estrada called. He said he heard Yasay say: "Hindi natin puedeng gawin yan. Kailangan po imbestigahin...kasi po bubwelta sa atin." (We cannot do that. We need to investigate because it will boomerang on us.)
Perez said he was certain that it was Estrada on the other line because Yasay's secretary announced over the intercom that the "President" is on the phone. Yasay also told him that the President was on the phone.
Perez wrote an opinion column about the incident only in March last year, when he was already working with the Daily Tribune.
Senator-Judge Ramon Revilla asked Perez if he was paid by Yasay because he (Perez) kept mum about the incident and wrote it about four months later.
Senator-Judge Miriam Defensor-Santiago implied that Perez was guilty of eavesdropping on someone else's phone conversation.
The President was impeached by the House of Representatives in November on charges of bribery, corruption, betrayal of public trust and culpable violation of the constitution.
Edgardo Espiritu, a former finance secretary, testified that Estrada told him the money came from his partnership with Dante Tan, the controversial founder of gaming firm BW Resources Corp.
As President, Estrada is barred from indulging in any business activity, as it would amount to conflict of interest.
Before Espiritu took the witness stand, former Philippine Stock Exchange (PSE) president Jose Luis Yulo was asked by two senator-judges on the four telephone calls President Estrada allegedly made to him.
Senator-Judges Tessie Aquino-Oreta and Juan Ponce Enrile, on separate occasions, pointed out that the President merely instructed Yulo to "expedite" investigation on Tan in relation to allegations of insider trading of BW shares.
Yulo quoted Estrada as saying: "Tapusin na natin. Ikaw na ang bahala." (Let's finish this. You take care of it.)
The PSE official said he had interpreted the President's instruction that he should clear Tan of the allegations.
Asked by one senator-judge to rate Estrada as a candidate chief executive officer, former Yulo said: "I don't think I'd make him our CEO." Estrada, he explained, allowed his friends to run riot and nearly sink the company.
Regulators have said BW shares' yoyo- like ride in late 1999 led to the near collapse of the PSE in the biggest insider trading scandal in the country's history.
A judicial inquiry later led to the indictment of Tan and three others for securities fraud, a crime punishable by up to 21 years in jail.
While thousands of investors lost money in the share fiasco, Espiritu said he was dumbstruck by Estrada's revelation during a meeting in Malacañang while discussing the fallout of the stock crash on the economy.
"In the excitement of the President with regard to the upsurge of BW shares, he told me in Tagalog, 'Ed, I have already made a lot of money from BW shares," Espiritu told the impeachment tribunal hearing graft and other charges against Estrada.
This came to him as a shock because this confirmed Tan's allegations that he and the President were partners in the BW Resources. He had earlier refused to believe Tan's contention.
The prosecution then pointed out that Estrada did not only intervene to protect Tan but also to protect his own shares of stocks in BW.
Espiritu also claimed that Estrada pressured the Philippine National Bank into granting the BW Resources a P600-million loan despite the lack of collateral.
In an immediate reaction, Estrada's spokesman Ernesto Maceda said Espiritu's testimony was fabricated.
"Ed Espiritu is the prosecution's last card but I'm afraid it's not enough because his stories were fully invented and imagined," Maceda told reporters, adding the President watched the trial proceedings on television.
Espiritu did not say when his meeting with Estrada took place, nor the value of the stock windfall.
The head of the PSE's fraud surveillance unit at the time, Ruben Almadro, testified Tuesday that Tan earned P820 million from the trades in June 1999.
The stock peaked at P107 in October 1999 from about P2 at the start of that year, and plunged steeply thereafter, allegedly due to manipulation by Tan with the collusion of brokers.
The stock closed Thursday at 70 centavos, just below its book value.
Espiritu said he had met with Tan about the volatile stock price and later called on Estrada to discuss ways to resolve the huge unsettled trades generated by the investor frenzy on the BW shares.
At the meeting, Tan "admitted to me that President Estrada was his partner in BW Resources," said Espiritu, who quit his post a year ago after heading Estrada's team of economic advisers.
He said he emerged "discouraged" from the meeting with Estrada because "he did not issue a single instruction with regard to this problem," even as the stock exchange was saddled with P1.8 billion in unsettled trades.
Instead, he said Estrada told him: "Dante Tan is just a victim here. In fact we lost money here." He added that he could not believe that Estrada was more concerned about his stakes at BW rather on the possible collapse of the PSE.
Espiritu, a former banker, said he had submitted a letter to Estrada complaining about the damage wrought by presidential friends on the economy, as well as corruption in government.
He said he urged Estrada to formally order regulators and the exchange to release the report of their inquiries into the insider trading case in 30 days.
But Espiritu said the President told him that the corruption occurred in the finance department and that "you are just sour-graping." Espiritu was the first among Estrada's former or present senior circle of advisers to testify at the month-old trial.
He also told the court that Estrada also called on him, before he left for Los Angeles to spend the holidays there last year, asking him not to testify in the trial.
Yasay's testimony, on the other hand, was cut short as the hearing was suspended for the day.
He was asked about the President's alleged meddling in concerns of the SEC but with the defense's objection, Yasay's testimony was limited.
The impeachment court, though, is yet to rule on the defense's motion against some of the issues that the prosecution hopes to raise against Estrada through Yasay's testimony.
To support the claim that the President had made attempts to intervene in favor of Tan in relation to the insider trading case, the prosecution presented Emeterio Perez, business editor of Daily Tribune, as a witness.
Perez, former assistant business editor of Manila Times, testified that on Nov. 19, 1999 he was in Yasay's office when Estrada called. He said he heard Yasay say: "Hindi natin puedeng gawin yan. Kailangan po imbestigahin...kasi po bubwelta sa atin." (We cannot do that. We need to investigate because it will boomerang on us.)
Perez said he was certain that it was Estrada on the other line because Yasay's secretary announced over the intercom that the "President" is on the phone. Yasay also told him that the President was on the phone.
Perez wrote an opinion column about the incident only in March last year, when he was already working with the Daily Tribune.
Senator-Judge Ramon Revilla asked Perez if he was paid by Yasay because he (Perez) kept mum about the incident and wrote it about four months later.
Senator-Judge Miriam Defensor-Santiago implied that Perez was guilty of eavesdropping on someone else's phone conversation.
The President was impeached by the House of Representatives in November on charges of bribery, corruption, betrayal of public trust and culpable violation of the constitution.
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