Subject: [NEXTEL-1] Former Nextel executive to testify against US firm

From: Marcel <[email-masked]>
Date: Mon, 07 Apr 2003 22:50:12 -0400

Tuesday, April 8, 2003

CORPORATE NEWS
Former Nextel executive to testify against US firm
By Sheryll B. Casanova, Reporter

A former top executive of Nextel Communications Philippines Inc. (NCPI) has
revealed how foreign owners have taken full control of the company despite
Constitutional limits on foreign ownership of Filipino corporations.

In a sworn statement, Antonio M. Urera, former president and chief executive of
NCPI said that Nextel International Inc. (NII) used dummies to buy out Filipino
holding companies that have interests in NCPI in order take majority control of
the telecoms firm.

Urera said that the NII now has “almost full and absolute control of NCPI” with
a staggering 87.7-percent equity interest on NCPI.

Article 12, Section 11 of the Philippine Constitution provides that “no
franchise, certificate, or any other form of authorization for the operation of a public
utility shall be granted except to citizens of the Philippines or to corporations or
associations organized under the laws of the Philippines at least 60 per centum
of whose capital is owned by such citizens … the participation of foreign investors
in the governing body of any public utility enterprise shall be limited to their
proportionate share in its capital and all executive officers of such
corporation or association must be citizens of the Philippines.”

Davao City Congressman Prospero Nograles and Harlin Abayon, of Northern
Samar, have sought an inquiry on NCPI following reports that Filipino dummies
were used in order get around with the Constitution prohibition for foreign
companies and individuals to own more than 40 percent of any corporation or
association organized under Philippine laws.

NCPI was launched in 1996 after the US-based NII entered the country’s
telecommunications industry by purchasing a company called Top Mega, a Hong
Kong-registered company holding 30-percent interest of Infocom Network Inc
(ICNI), a Philippine telecommunications carrier.

Another foreign-registered company called Joyce Link owned 10 percent of
Nextel’s equity while the remaining 60 percent belonged to Gotesco Group owned
by Jose Go (20 percent), Jetcom Inc. owned by Bernard Asperin and Food Camp
Industries represented by Johnny Wong.

According to Urera, after securing 30-percent equity interest on Infocom, which
is supposed to be Nextel’s carrier, NII worked its way to gain control of Infocom
by buying out the 20-percent interest of Gotesco, using a company called Gamboa
Holdings Inc., with $9 million placed in three installments.

Using what Urera describes as “sophisticated scheme of indirect purchases,” he
said NII made it appear that Filipino-owned third party purchaser Gamboa
Holdings would acquire Gotesco’s share in Infocom.

Forty percent of Gamboa’s common shares belong to Top Mega, which is wholly
owned by NII.

According to Urera, after the Gotesco buy-out, the NCPI is owned by Top Mega
(30 percent), Joyce Link Inc. (10 percent), Jetcom Inc. (32.3 percent), Gamboa
Holdings (20 percent) and Foodcamp Industry and Marketing Inc. (7.7 percent).

In July 2002, NII acquired Joyce Link from the AIG Group while ACCRA Investment
Corp. (ACCRAIN), the majority stakeholder of Gamboa, incorporated another
company called Emerald Investments Inc. in partnership with another company
called Orient Holdings Ltd, another NII subsidiary.

Emerald Investments was used to acquire the shares of Foodcamp Inc.

Emerald Investments went on to acquire the 30 percent of 32.3 percent share of
Jetcom Inc. for $3.7 million, Urera said.

“To date, NII, through it’s subsidiaries, has accumulated 40 percent ownership
of the capital stock of NCPI through the purchase of Top Mega and Joyce Link and
roughly 19.08-percent indirect foreign ownership in the capital stock of NCPI
through the shares it purchased in Emerald and Gamboa for a total of
59.08-percent in interest in the capital stock of NCPI,” Urera said.

Nextel officials could not be reached for comment.
http://www.manilatimes.net/national/2003/apr/08/business/20030408bus11.html

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