SSS official denies wrongdoing in stock purchases

Christian V. Esguerra, ABS-CBN News

Posted at Nov 03 2017 01:16 PM | Updated as of Nov 03 2017 02:44 PM

MANILA - One of the Social Security System (SSS) officials under investigation for alleged profiteering admitted earning from a stock investment but denied withholding information from the state-run pension fund or putting it at a disadvantage.

The SSS could not legally invest in cemetery developer Golden Haven Memorial Park Inc. (HVN) because the company had no previous dividend payment as required by law, Ernest Francisco Jr., officer-in-charge of the fund management group, said in his October 30 counter affidavit, a copy of which was obtained by ABS-CBN News.

"There is, therefore, no basis (for claiming) that my return on investment from Golden Haven disadvantaged SSS,” he said.

Francisco admitted earning P180,372.15, which was less than half of his supposed P413,000 profit, an allegation he attributed to Commissioner Jose Gabriel La Viña’s “poor mathematics.”

Under the Social Security Act of 1997, the investment reserve fund can be invested in listed equities, or those about to be listed, “with a 3-year track record of profitability and at least 1 dividend payment in the past 3 years,” Francisco said.

"The allegation that we did not recommend investments in IPO to deprive SSS of possible investment opportunities is false,” he said.

La Viña, who heads the investment oversight committee, accused Francisco and Vice President Reginald Candelaria of taking advantage of information they received from an SSS-accredited broker to profit from IPOs.

Executive Vice President Rizaldy Capulong and chief actuary George Ongkeko Jr. were also named in the administrative complaint for allegedly allowing the purchase.


Candelaria and Ongkeko had resigned while Capulong and Franciso were placed on floating status, SSS chairman Amado Valdez had told ANC.

But Valdez did not say whether the resignations had anything to do with La Viña’s complaint. Valdez also clarified no SSS fund had been misused.

Francisco earlier issued a statement criticizing La Viña, President Rodrigo Duterte’s social media director during the campaign, for going public with his complaint and resorting to “trial by publicity.”

Golden Haven was among the 10 companies that launched IPO from August 2015 to August 2017, Francisco said.

He said his investment in Golden Haven had been “pre-approved and pre-cleared” under the commission’s guidelines and “therefore not concealed to SSS for my gain.”

Private companies go public through IPOs to generate more capital for expansion.


Of the 10 companies, the Social Security Commission, the pension fund’s policy-making body, accredited only Cebu Landmaster Inc. in time for the IPO listing, Francisco said.

Metro Gaisano Retail Stores Group (MRSGI) had been recommended to the investment oversight committee, but the commission accredited it only “after IPO listing,” Francisco said.

Francisco said he bought 40,000 MRSGI shares at the IPO then sold 10,000 shares on listing date for a profit of only P269.

He admitted buying shares of Store Specialist Inc. (SSI) during its IPO, but noted it was “not investible to SSS” because of its small market capitalization.

Then, the Social Security Commission has no risk appetite for small cap stocks,” said Francisco, who noted that he in fact lost P21,540 from the SSI stocks purchase.

“Contrary to the complainant’s assertion that IPOs are all profitable, they are not always profitable.”