BIZ BUZZ: A BAD WEEK

Legal setbacks for tycoon Enrique Razon Jr. are a rare thing. In fact, they’re almost unheard of in recent years. Until last week.

A few days ago, the businessman’s Bloomberry Group announced that it had lost an arbitration case in Singapore over their firm’s decision in 2013 to terminate the services of Global Gaming Philippines LLC (GGAM) led by former Solaire COO Michael French.

Back then, it was no secret that Razon was unhappy over how his flagship casino resort was being run by the expat team that helped the project get off the ground. The operating expenses were getting out of hand (even for a dollar billionaire like Razon) and so he decided to stop throwing money into the money pit and revamp Solaire.

Well, the expat team wasn’t too happy about getting the proverbial pink slip so early in the game so they went to court, and last week’s judgment was the result.

The damage? A preliminary amount of over $100 million, according to Bloomberry’s disclosure, plus an order by the court to buy back more than P10 billion worth of GGAM shares in the the leisure firm. That’s a lot of money.

Then Biz Buzz heard soon after that the billionaire also encountered another setback recently, this time in the Supreme Court. That was after the high tribunal last month—hearing a case over Razon’s decision to move into the Iloilo City power distribution business—decided to throw a roadblock in front of the drive to expropriate the assets of Panay Electric Co. Inc. (Peco) owned by the Cacho family.

For sure, it wasn’t a permanent roadblock but a temporary one, with the court saying that the tycoon was forum shopping by elevating the issue up the legal pyramid while “vigorously pursuing” the expropriating case for Peco’s assets.

The court didn’t exactly put a halt to Razon’s power moves in Iloilo but put a pause to it, by denying him the injunction he asked for against a Mandaluyong lower court that ruled in the Cachos’ favor and asking him to file a comment on the issue.

Two legal setbacks in a row? You don’t see that everyday. But Razon’s camp brushed them off, saying that they would appeal the arbitration decision and continue with the drive to take control of the Iloilo power distributor. It’s just a matter of time, his allies said (and we’re actually inclined to believe them, historically speaking).

Of course, just a week before all this, Forbes magazine unveiled its annual “rich list” for the Philippines, which showed Razon’s net worth skyrocketing to $5.1 billion this year from the previous year’s $3.9 billion—a hefty increase of $1.2 billion—and making him the country’s fourth richest man (from fifth last year).

That’s a lot of resources that can be used for the long, hard legal slog ahead. So maybe it’s not all that bad. —DAXIM L. LUCAS

Telco investment boom

The third telco player—and the billions of dollars it’s expected to spend—may be a year or so away but that hasn’t stopped the current administration from reaping a windfall in terms of investments in the information and communications sector.

At P308.8 billion in the eight months through August this year, investments in the segment accounted for half of P609 billion approved by the Board of Investments (BOI).

The scale of that increase is significant, considering ICT (information and communications technology) generated some P340 million in investments during the same period in 2018.

A lot of this has to do with the Department of Information and Communications Technology’s (DICT) initiatives, including the third telco selection process and the supporting common tower program.

Those were mainly spearheaded by former DICT acting Secretary and now Undersecretary Eliseo Rio Jr.

He told Biz Buzz that bulk of third telco Dito Telecommunity’s commitment to spend P150 billion in the first year alone had yet to materialize.

Even then, telco incumbents PLDT Inc. and Globe Telecom are spending record sums to upgrade services and of course, counter this threat.

Other Ict-related big ticket investments identified by the BOI are the P141 billion from Filipino company ISOC Asia Telecom Towers, which partnered with Malaysia’s edotco to build thousands of shared cell sites across the country.

Another big project is the P134.5-billion fiber project of Philippines Fiber Optic Cable Network Ltd., which is part of China’s Hyalroute Group.

It’s interesting to note that these DICT initiatives were able to generate such numbers considering its relatively paltry budget of about P4 billion in 2019.

Assuming the DICT can get a massive budget request of P36.3 billion—and that it can implement all its projects despite an apparent lack of manpower—we can expect such investment numbers to move higher in the years to come. —MIGUEL R. CAMUS

Second act

What is former presidential spokesperson Edwin Lacierda up to nowadays? You might be surprised to know it’s nothing political. At least not in this particular venture.

We’re talking about Paymongo, a six-month old Y Combinator-backed financial technology company that aims to simplify payments for the modern business. The company recently announced it secured a $2.7-million investment from Silicon Valley investors including Founders Fund, Paypal cofounder Peter

Thiel and Stripe. In addition, Y Combinator, Global Founders Capital, Soma Capital, Tinder cofounder Justin Mateen and a number of other angel investors both here and abroad also participated in the seed round.

In a statement shared with Biz Buzz by the former Aquino Cabinet official, the firm said this investment was recordbreaking in terms of the amount raised for any startup in the Philippines. In addition, for a majority of its Silicon Valley based investors, it is their first investment in a fintech startup from the Philippines.

This fresh set of capital will allow Paymongo to grow the team, accelerate product development, acquire businesses more aggressively and close down on many strategic partnerships, the company said.

Paymongo, whose products offer easy ways for merchants to receive payments online including shareable payment links and readily available APIS, aims to become a major driver in the rapid growth of the internet economy in the Philippines and Southeast Asia.

In the near term, Paymongo targets to grow its base in the Philippines, a market with largely untapped opportunities, and become the biggest payment service provider in the country. Over the next few years, the company plans to offer more products and services to its merchants and eyes expansion toward the rest of Southeast Asia.

The firm is led by 26-year old CEO Francis Plaza, and since launching in mid-june, the company has built a network of more than 1,000 businesses using the platform to receive online payments with the total transaction value growing at an average of 117 percent week-over-week.

Founded only last March by four people with diverse backgrounds comprised of Plaza (an MIT engineer), Jaime Hing II (software engineer), Luis Sia (entrepreneur) and Lacierda, Paymongo has attracted interest and investments from both the finance and technology sectors, including Y Combinator.

Four months ago, Paymongo became the first Philippine fintech firm to make it to Y Combinator joining the accelerator’s class this summer.

Not bad for a second act.