Ombudsman Suspends GSIS Chiefs Over P1.45-B Share Deal
The Office of the Ombudsman has ordered the preventive suspension of Government Service Insurance System (GSIS) President and General Manager Jose Arnulfo “Wick” Veloso and six other executives. This move concerns the purchase of P1.45 billion worth of preferred shares from Alternergy Holdings Corp. (AHC) made in November 2023.
This suspension marks a crucial step in addressing alleged misconduct related to the share acquisition. The anti-graft body cited “strong evidence showing their guilt” for grave misconduct, gross neglect of duty, and violation of reasonable office rules and regulations. The order is immediately executory under Republic Act No. 6770, also known as the Ombudsman Act of 1989.
Officials Named in Suspension Order
According to a seven-page order dated July 11 and released to the media, the following GSIS officials were suspended alongside Veloso:
- Executive Vice President Michael Praxedes
- Executive Vice President Jason Teng
- Vice President Aaron Samuel Chan
- Vice President Abigail Cruz-Francisco
- Officer II Jaime Leon Warren
- Acting Office IV Alfredo Pablo
Details Behind the Suspension
The Ombudsman’s decision came after a thorough investigation, culminating in a recommendation based on a January 30 report. The GSIS subscribed to 100 million preferred shares of Alternergy for P14.50 each during a private placement on November 7, 2023.
However, the purchase lacked the approval of the GSIS board of trustees, violating internal governance protocols. The investigation revealed that the shares were not listed on the Philippine Stock Exchange at the time of the transaction. Further, the investment did not meet the minimum market capitalization requirements and exceeded the free float market capitalization cap.
Violations of GSIS Investment Policy
The officials also failed to secure necessary endorsements from the assets and liabilities committee and the risk oversight committee before proceeding with the investment. These lapses contravened the 2022 GSIS Investment Policy Guidelines, raising serious concerns about procedural breaches and risk management within the agency.
The Ombudsman’s preventive suspension aims to preserve the integrity of the investigation while preventing possible interference or further misconduct. The suspended officials face charges that could have serious implications for their careers and the agency’s reputation.
Local sources emphasized the importance of transparency and accountability in public financial transactions, urging swift resolution and reforms.
For more news and updates on GSIS share deal suspensions, visit Filipinokami.com.
