Business groups released a statement urging the Senate and government agencies to conduct a deeper inquiry into the controversial buyout of Malampaya.
Included in the joint statement are the Makati Business Club, the Financial Executives Institute of the Philippines, the Energy Lawyers Association of the Philippines, the Filipino CEO Circle, Integrity Initiative, Investment Houses Association of the Philippines, the Philippine Women’s Economic Network, and the Women’s Business Council Philippines.
One of the concerns that the groups raised is the question of why the government did not exercise its right of first refusal or the right to match.
The groups said that the government—by not exercising the right to match option, is giving “tens of billions of pesos.” This can also “put the country’s energy and national security at risk.”
“The government should scrutinize the buyer’s financial and technical capabilities and interests and should reserve, enforce, and exercise its right to block and invalidate transfers of shares and control that may be disadvantageous to the Filipino people,” the groups said.
The statement did not specify which “buyer” or “company” but reports said it will include Udenna Corporation led by businessman Dennis Uy.
Uy’s company has taken over Chevron Malampaya and SPEX, meaning it has a majority share of Service Contract 38 (Malampaya gas-to-power project).
The groups also pointed to the government’s failure to extend the service contract which is reportedly the reason which compelled Chevron and Shell to sell.
The government may have “breached its fiduciary duty,” the groups said.
Uy and Department of Energy Secretary Alfonso Cusi, currently face a graft
complaint at the Office of the Ombudsman over the said alleged anomalous buyout.
Udenna earlier said its acquisition of the interest of Chevron Malampaya LLC and Shell Philippines Exploration B.V. in the Malampaya natural gas project is above board.
Udenna spokesperon Raymond Zorrilla said there is no law requiring the approval of transfer of shares of companies that have interest in Malampaya. “Therefore, no party has the legal ability to rescind the Chevron and Shell transactions,” Zorrilla said.
He said Udenna, as a key investor in UC Malampaya Philippines Pte. Ltd., would stand by the legal position.
Several groups have called for a government takeover of the Malampaya gas project amid questions regarding the technical, financial and legal capability of the group of Uy, founder of Udenna Corp.