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Bayan Muna Airs Warning on Petron Sale to Ashmore, SMC

PHILIPPINES: Party list group Bayan Muna is sounding the alarm bells over the impending sale of over 90% of Petron Corp. shares to UK-based investment fund Ashmore Group, calling it a "sinister conspiracy" between foreign investors and Filipino officials "out to make a quick buck at the expense of the Filipino people."

"We are wary over the recent developments in Petron. First, government allowed the Ashmore Group to gain a majority by buying Saudi Aramco's 40% share in the company for a song. Not six months have passed and Ashmore is now flipping it's 40% stake over to San Miguel Corp. (SMC). Today, Ashmore is again poised to buy the remaining 40% government share in Petron at an even cheaper price. We wonder, to whom will Ashmore flip it this time?" said Bayan Muna Rep. Teddy Casiño.

In March this year, Casiño called the sale of the Saudi Aramco shares in Petron to a subsidiary of London-based investment firm Ashmore a "shady deal" and a "fire sale." At $550 million, he said Ashmore's buying price for Saudi Aramco's 40% stake in Petron was very cheap considering that the Saudi-government owned company bought its stake for about $530 million in 1994.

Today, with the global downtrend in share prices, Ashmore would be getting the remaining 40% government share at an even cheaper cost, estimated at only $360 million. "This is the worst time to sell Petron, as share prices are so low due to panic selling in the stock markets," warned Casiño.

Saying that Ashmore was an asset management company and not a player in the oil industry, he said: "Our worry is that Ashmore is conniving with certain government officials in buying large chunks of Petron shares and then flipping it over to other companies for a quick buck. Laway lang ang puhunan," the militant solon said.

The sale of government's 40% stake in Petron would also give Ashmore more than 90% control of the company, which Casiño said possibly violates the terms and conditions of Petron's privatization as well as raises constitutional issues on foreign ownership of companies in the oil industry.

He called on the Securities and Exchange Commission (SEC) and Philippine Stock Exchange (PSE) to look into the matter but said it merited a congressional investigation as well.

He also called on the Executive not to push through with the sale of its remaining shares in Petron to the Ashmore Group, saying national control of an oil company was crucial in today's era of oil price volatility.

"Instead, the government should take majority control of Petron and operate it like a national oil company that serves the needs and interests of the Philippine economy and Filipino consumers," he stressed.

Casiño, along with other progressive party list representatives, has filed House Bill No. 3031 mandating government to buy back majority shares of Petron. The bill is pending in the House Committee on Government Enterprises and Privatization since November 13, 2007.

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