Makabayan bloc seeks probe of GSIS ‘high-risk’ deals
Lawmakers from the Makabayan bloc are seeking a House inquiry into the allegedly anomalous investments made by the Government Service Insurance System (GSIS), including its P1-billion stake in an online gaming firm.
The lawmakers said the House should scrutinize the state pension giant’s “high-risk and speculative investments” using contributions of at least 2.6 million members and pensioners, who are hoping to receive benefits whenever they need them.
The GSIS has nearly P2 trillion in assets.
ACT Teachers Rep. Antonio Tinio, Gabriela Rep. Sarah Elago and Kabataan Rep. Renee Co singled out the GSIS’ more than P1-billion stake in DigiPlus Interactive Corp., an online gaming firm.
The firm recently lost about “69.7 percent of its value due to heightened regulatory risks in the e-gaming sector,” they said in House Resolution No. 415, calling for an investigation.
“The House of Representatives must scrutinize these and many other questionable investments made using the fund entrusted by GSIS members and pensioners, weigh these ventures against existing laws and rules, and strive towards greater safeguards against dissipation of funds in favor of high-risk and speculative investments, more conscientious corporate management, and accountability for violations of GSIS executives and officials of their fiduciary trust,” they said.
Alternergy deal
The lawmakers also mentioned the GSIS’ purchase of 100 million shares of renewable energy pioneer Alternergy Holdings Corp. worth P1.45 billion.
The GSIS has been wracked by an internal rift, with three members of the board stepping down after calling for the immediate resignation of president Jose Arnulfo Veloso over his investment strategies, which they claimed had resulted in losses of P8.8 billion.
GSIS trustees Ma. Merceditas Gutierrez, Emmanuel Samson and Rita Riddle tendered their resignations, effective upon the appointment of their successors.
The resignations came days after the three, along with another incumbent member of the board, sent a letter to Veloso demanding his “immediate and irrevocable” resignation over “poor investment decisions” that were “marked by a disturbing lack of transparency.”
They cited what they described as “a pattern of actions seemingly designed to bypass proper governance,” including the alleged practice of splitting investment transactions—a “clear tactic,” they wrote, intended to evade the mandatory board review for investments exceeding P1.5 billion.
‘Calculated risks’
They accused Veloso, who recently returned to his post after a preventive suspension ordered by the Office of the Ombudsman, of “fabricating issues and weaponizing administrative procedures to retaliate against [board] members exercising their fiduciary duty of oversight.”
Veloso had defended the GSIS’ investments. He said that the GSIS had already made P139 million from its exposure to DigiPlus, while its P1.45-billion investment in Alternergy, a renewable energy developer, could yield P2.22 billion within seven years.
“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,” Veloso said during a Kapihan sa Manila Bay forum last Sept. 24. “When you invest in equities, you need to understand that they have volatilities,” he added.
