Clash of the Titans
WHAT happens when two “titans”—one of the country’s biggest banks and the other a multinational consumer goods giant—collide? The business community is sitting back to watch the potential fireworks explode.
News about this has been kept to a minimum, but the implications of this skirmish have been dominating coffee shop buzz for weeks now (if you’ve been following Biz Buzz, this issue initially surfaced a few months ago). The bank has included the multinational giant as co-defendant in a P170-million suit.
It seems that the multinational giant had some trouble a while back in Central Luzon, when its regional sales manager (coupled with the multinational’s own carelessness and neglect) was able to scam its area distributors a total amount estimated at close to a billion pesos.
Instead of reporting this to its stakeholders (especially creditor banks), the multinational reportedly chose to keep the entire thing strictly hush-hush. In the meantime, the company continued to provide glowing reviews and endorsements for its cash-strapped Central Luzon distributors to enable them to secure loans. As a result of this false representation, banks continued lending the distributors.
Predictably, this cycle eventually crashed. In its wake were left numerous bankrupt distributors and banks holding the bag. One particular bank conducted its own investigation and learned that the very root of the problem was the multinational’s business practices.
Odds are in favor of the bank as sources point out that it has extraordinary leverage against the multinational: the bank just happens to be owned by the country’s biggest retail operation and can therefore lock out the multinational’s products from all its shelves. Daxim L. Lucas