Biz Buzz: Broken ceasefire

It was probably too good to last. After almost a month of peace and quiet at The Medical City, the warring factions at one of the country’s most established health institutions are at each other’s neck again.

This time, one side hoped to break the impasse by announcing the holding of a special stockholders’ meeting, while the other side, in response, immediately went public to say that key issues must first be resolved before such a meeting could take place.

At stake is control of the multibillion-peso institution that is also being wooed by at least one blue-chip conglomerate hoping to enter the country’s lucrative and growing health care industry. Last week, Medical City chair

Augusto Sarmiento fired off an e-mail that was circulated to the hospital’s shareholders announcing that a special stockholders’ meeting would be held on Sept. 13 since they could no longer wait for the hospital’s board to stop blocking the conduct of one. “They” refers to the Singapore-based Claremont Group and the hospital’s treasurer Jose Xavier “Eckie” Gonzales who, together, hold 54 percent of the company’s shares.

But Medical City CEO Alfre-

do Bengzon claims that that stake was illegally accumulated by Claremont and Gonzales on the sly, in violation of corporate rules that require parties to fully disclose their intentions of buying a majority stake.

Bengzon fired off his own email on Monday slamming his “frenemy” Sarmiento for basically violating the terms of the truce arrived at by both camps earlier this month, and urged the hospital’s shareholders to stand with him instead.

Sarmiento says he has the signatures of enough owners (60 percent, to be exact) to bypass the board’s veto of the shareholders’ meeting, but Bengzon countered “not so fast.”

Instead, Bengzon is urging the Securities and Exchange Commission to rule on his camp’s petition hoping to declare the accumulation of shares of Claremont and Gonzales as illegal. The SEC has already asked both camps to comment on the petition and, as expected, both camps are interpreting the moves of the corporate regulator in their favor.

Meanwhile, word from among the hospital shareholders, doctors and staff is that they’ve grownweary and demoralized by the tug of war between Bengzon and Sarmiento, both of whom are well respected icons of the Philippine medical world.

Sarmiento, together with Claremont and Gonzales, controls 54 percent of the hospital’s shares. But Bengzon still controls the board of directors under the old setup—a setup that will likely be changed if the shareholders’ meeting pushes through in two weeks.

The question now is this: Whose side will the SEC take in this landmark case? Abangan! —DAXIML. LUCAS

Solaire vs councilor (and judge?)

One challenge with running an upscale leisure establishment is that one has to contend with the occasional case of high-profile personalities who break the rules on your premises.

In the case of Solaire Resort and Casino, however, it also has to contend with officials of the justice system who are… let’s just say… behaving suspiciously.

Last month, a councilor from a Metro Manila local government—a city that hosts a relatively new central business district—booked a room in the casino resort owned by tycoon Enrique Razon Jr.

The councilor stayed in the hotel for four days and, by all accounts, had a great time there, playing host to several friends and a bevy of girls during this period. After all the partying, however, his friends departed and he was left to check out of the hotel on his own (possibly under the influence of some unknown substance, we’re told).

As he was behaving strangely, he was accosted by the hotel’s security staff and his belongings searched. Lo and behold, they found him trying to sneak out the hotel room’s iPod dock speaker, an ashtray, a wine bottle opener and corkscrew, a lightbulb (no kidding!) and even a ballpen (OK, maybe he could’ve taken that last one without incident).

But the security personnel also found in his possession 35 tablets that were later determined by the Philippine National Police to be “ecstasy” tablets.

Solaire filed two cases against him. The case for theft was a bailable offense, but drug possession was not. Here’s where it gets interesting. The Parañaque City judge handling the drug complaint has threatened to dismiss the case saying the hotel’s security personnel were not authorized to search the suspect because they were not police officers. What?

In any case, Solaire has filed a petition at the Supreme Court moving for the judge to be removed from the case as well as all other cases involving the hotel and its holding firm.

But if Solaire’s petition is rejected, the party-going ecstasytoting councilor will almost certainly walk free to party hard again, having been caught in the act notwithstanding. What a shame. —DAXIML. LUCAS

Blockchaining banking

American aircraft maker Boeing has discovered how a decentral- ized ledger running on blockchain technology can be useful for the promulgation of manuals for spare parts to airlines. In the past, it would send a manual on how to install each spare part, but, sometimes, the instructions have to evolve to incorporate new learnings from the aviation industry as well as new specifications from airline regulators/inspectors. To update the manuals simultaneously around the world, Boeing decided that blockchain is the solution.

Inspired by Boeing’s use of blockchain, Union Bank president Edwin Bautista thought that the same could be done with banking manuals. This means that beyond payments solutions, blockchain could be useful to local banks—and even banking regulators.

Bautista recalled that during the 2016 incident at RCBC—referring to the $81 million in dirty money stolen by cybercriminals from Bangladesh Bank that slipped into several fraudulent accounts at RCBC’s Jupiter branch and laundered in local casinos—investigators had to refer to the bank’s manuals to determine to what level of authority was needed to approve a certain amount of transaction or remittance inflow.

If there’s internal fraud in any bank, Bautista said it was theoretically possible for someone to change a regulation in the manual, even electronically, to state that all it takes is a branch manager to authorize a bank transfer of up to $1 billion.

In the last few months, Union Bank has thus applied blockchain to codify its banking manuals.

“We have four nodes. Each one has to confirm with each other and all distributed to each other and they all have to agree. So you can hack one but not hack all of it. That’s the perfect use case for blockchain. You know that the manual that you’re looking at is the most current. Only the author can change anything and any change thereafter can be traced back,” Bautista told Biz Buzz.

And when Union Bank presented this solution to the Bangko Sentral ng Pilipinas, Bautista said the banking regulator also now wanted to promulgate its circulars in blockchain.

As for Union Bank, other potential blockchain applications abound. The bank is now using this solution for credit cards and wants to likewise apply this on its car financing program in the future.

“There are so many applications, but the most important thing is it will allow us to learn,” he said. —DORIS DUMLAO-ABADILLA