A SENIOR legislator said the Maharlika Wealth Fund bill contains sufficient punishments for mismanagement, and disputed the view put forward by critics that the bill is “beyond repair,” saying that the legislative process will tweak the measure further to address any concerns about Maharlika’s governance.
House banks committee chairman Rep. Irwin C. Tieng noted on Monday that House Bill 6398 proposes a P2-million maximum fine and up to five years’ imprisonment for fund officials who violate investment policy or commit acts of gross negligence.
“Any director, trustee or officer who will fully and maliciously violate investment policies and guidelines set by the board of directors as defined pursuant to Section 19 of this act, or whose acts of gross negligence, willful misconduct, (or) fraud actions in breach of any investment agreement (result) in a loss suffered by the fund shall be liable,” Mr. Tieng told reporters.
Legislators were working to address any governance loopholes in the bill, which has attracted backlash over its original plan — since withdrawn — to seed the fund with pension money from the Government Service Insurance System and the Social Security System.
The banks committee has approved amendments that include removing the Maharlika Wealth Fund’s exemption from the competition law, and a requirement to invest 20% of the fund’s net profit in social welfare projects.
The board will also have four independent directors instead of two. Any investment is subject to assessment by the investment officer, an advisory board, and the National Economic and Development Authority.
The Secretary of Finance was also installed as the Maharlika board’s chairman for a fixed term of seven years, replacing the President.
Mr. Tieng added that the corporation to be created under the bill, the Maharlika Investments Corp., will only act as a passive investor and will manage companies it invests in.
On claims that the bill is “beyond repair,” Mr. Tieng said, “We’re trying our best… Let’s not call it ‘beyond repair’ because we’re doing this to improve the bill and at the same time, show how much it could help our country.”
The House Committee on Appropriations on Friday approved a provision requiring the central bank to surrender 100% of its dividends — about P30-35 billion a year — to the fund.
The Maharlika legislation was recast late yesterday as a substitute bill, House Bill 6398, in which the measure refers to the fund as the Maharlika Investment Fund. — Beatriz Marie D. Cruz