GSIS chief stands by Alternergy, Digiplus investments; windfall cited
Government Service Insurance System (GSIS) President Jose Arnulfo Veloso defended the pension fund’s investment in Alternergy Holdings Corp. and DigiPlus Interactive Corp., citing windfall from both listed companies.
Veloso said the GSIS had already made P139 million from its exposure to online gaming firm DigiPlus, while its P1.45-billion investment in Alternergy, a renewable energy developer, could yield P2.22 billion within seven years, “or a 56 percent return.”
“When you are in the investment business, you make calculated risks; you do research; you study. We invested in a legal listed corporation in the Philippines,” he said during the Kapihan sa Manila Bay forum on Wednesday.
“When you invest in equities, you need to understand that they have volatilities,” he added.
Back in action
In an order dated Sept. 17, the Office of the Ombudsman lifted the preventive suspension of Veloso and four other executives, saying their presence would not impede an inquiry into the disputed stock investments.
The officials were suspended in July as an anonymous complaint questioned the GSIS’s investment in Alternergy, which had been flagged earlier by the Commission on Audit. It was a six-month suspension meant to prevent them from influencing the inquiry.
The complaint implicating Veloso and other GSIS officials triggered a probe into the due diligence, risk exposure and the use of pension funds in the controversial stock investment.
State auditors warned that the deal with Alternergy exposed a “significant amount of members’ contributions to high risk” and may harm the financial health and stability of the pension fund.
Meanwhile, lawmakers hit the pension fund’s exposure to DigiPlus, previously a stock market darling that suffered a brutal sell-off amid proposals in Congress to ban online gambling due to its adverse social impact.
Even so, Veloso maintained that those investments had been carefully studied by the GSIS.
“These are investments that are being done because of our understanding of opportunities and risks,” he said.
