Scorched-earth policy: Five insurers litigate SteelCorp.’s P2-B claim as sixth breaks ranks

The business proverb – If you owe millions to a bank, you are at their mercy; if you owe it billions, then the bank is at your mercy – does not hold true for insurance firms, as the Steel Corp. of the Philippines has ruefully found out.

Six years after a fire razed the SteelCorp.’s cold rolling mill in its Balayan, Batangas plant, five of the six local insurers have opted to litigate rather than pay the P2-billion replacement claim, now running close to P4 billion if accrued penalties were added up.

The sixth, Standard Insurance, broke ranks and chose to settle its 12- percent share after the foreign insurance adjusters and fire forensic experts ruled out arson in the Dec. 8, 2009 fire.

SteelCorp. needs to replace the burnt half of its plant, if it wants to stay competitive against the onslaught of Chinese imports, said chief finance officer Alberto Espiritu.

Because it was the only steel company that manufactured its cold-rolled coils that, in turn, translated to lower production costs, SteelCorp. had cornered 20 percent of the steel roofing sheet market prior to the unfortunate conflagration.

“Without the cold rolling mill being replaced, SteelCorp. is, in fact, better off importing the finished goods than producing them locally out of imported coils,” said Espiritu. “But do we, as a country, want to remain importers and forever dependent on other countries even for our basic shelter?”

But SteelCorp.’s insurers, Mafpre Insular, Charter Ping An, Asia Insurance, New India and Malayan have their bottom lines and even survivability to worry about, rather than concern themselves with patriotism and even the Chinese trade dominance.

With arson no longer a reason to deny the SteelCorp’s claim, the five insurers still chose to slug it out, all the way to the Supreme Court if need be as they had done in an earlier round, anchoring their denial on the best, most convenient defenses: alleged lack of jurisdiction and prescription.

“As they appear not to have any physical evidence, they (insurance companies) are looking for financial evidence that would have acted as motivation for arson,” said SteelCorp.’s Singapore-based claims consultant, Peter Salt.

SteelCorp. has until today to file its answer why the Insurance Commission should not dismiss its administrative complaint against the five insurers for lack of merit and, of course, prescription and forum-shopping.

A similar civil complaint, also to force the insurers to pay up, is pending before Makati Regional Trial Court Judge Josefino Subia, with the five insurance companies seeking outright to dismiss the case for having allegedly been filed past the deadline.

In both cases, SteelCorp. is represented by BalgosLaw while the insurance companies, by Nestor Mejia, the corporate secretary of the Philippine Daily Inquirer.

Mejia is, incidentally, best remembered by the paper’s shareholders as the legal counsel of a minority group that ousted then Inquirer president Artemio Panganiban, before the latter ascended to the Supreme Court.

That was apparently why SteelCorp. raised an inordinate amount of fear against Mejia in a legal brief. But that, as they say, is another story.

Money talks

• After gifting each of his children their own homes in Dasmariñas Village from the windfall of the Liberty Telecoms sale, telecom entrepreneur Raymond Moreno apparently still has a considerable pile left that he decided to bequeath his lone unmarried daughter, Ana Martha Maria, with a Manila Polo Club share.

Per market information provided by trading firm GG&A Club Shares, latest asking price for a Manila Polo share is P12.4 million.

• Coca-Cola Bottlers, the paint company Dutch Boy and even the heirs of the late Transportation Secretary Josefina Lichauco have all come to the conclusion they would rather have their Makati Sports Club shares auctioned off for non-payment of dues rather than continue on with their respective memberships.

Their three shares, along with 10 others, are scheduled to be sold via viva voce bidding on July 24.

• Bloomberry owner Enrique Razon has been hauling in and out a growing number of high- rollers into his Solaire casino- hotel that he has been forced to hire an expatriate to run the gaming concern’s aviation operations.

The expat was imported from mainland China, naturally.

The Supreme Court en banc has rejected the appeal of the Development Bank of the Philippines and ordered its former chairman Vitaliano Nañagas III and director Eligio Jimenez to reimburse P1.57 million in unauthorized travel expenses the two had incurred in 2004.

Nañagas was found to have flown three times to Vietnam, Japan and Hong Kong in October and November 2004 while Jimenez embarked on a month-long trip to the United States in October 2004, with both bankers failing to secure prior clearances from Malacañang.

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Heard through the grapevine