The “BW Resources” stock manipulation scandal

James Ryan Jonas

Here’s a story of a company whose stock price rose a staggering 18,025% in one year — from P0.80 in October 1998 to P145.00 in October 1999 — and its consequent crash that almost put the Philippine stock market into collapse.

Who is Dante Tan and what is the Best World (BW) Resources stock scandal? Read on.

The Beginning

Dante Tan, a friend of former Pres. Joseph Estrada and contributor to the latter’s presidential campaign, formed Best World Gaming and Entertainment Corporation (BWGE) in 1998. In 1999, Tan became a majority shareholder of a tourism and leisure company called BW Resources and BWGE became a wholly-owned subsidiary of BW.

Allegedly due to Tan’s close relation with Pres. Estrada, Tan’s companies were able to secure gambling licenses from the Philippine Amusement and Gaming Corp. (PAGCOR).

On December 1998, BWGE won the exclusive contract to operate a nationwide online bingo franchise as well as the jueteng-like Quick Pick-2 gambling game.

The Endorsement

Alice Reyes, then chair of PAGCOR, later told a congressional hearing that BWGE got the online bingo license because “it had the endorsement of the Office of the President.”

In 1999, BW and BWGE was also able to co-borrow P600 million from the Philippine National Bank (PNB), then a government-owned bank.

The Stock Price Surge

These developments triggered massive interest in the BW stock from stock traders and analysts. Rumors that Macau’s gambling mogul, Stanley Ho, was coming in as BW Chairman also fueled further stock-buying.

Although the stock market was still in a bearish trend following the 1997 financial crisis, the BW stock bucked the trend with its price continuously rising.

Within one year alone from October 1998 to October 1999, BW’s stock price jumped an astounding 18,025% — from P0.80 (US$0.0166) to P145.00 (US$3.01).

At one point, it even became the most traded stock in the Philippine Stock Exchange, beating perennial blue chip stock TEL (Philippine Long Distance Telephone Co.)

The Price Crash


Stanley Ho visited the Philippines in late 1999. The plan to operate gaming casinos, however, was heavily opposed by the Catholic church, with Ho being accused as part of the Chinese triad.

The plan eventually did not materialize and just a week after Ho’s visit, BW’s stock price plunged below P30.00. The price continued falling weeks later, even reaching below P1.00 and thousands of stock traders and investors lost millions in the process.

The Philippine Stock Exchange then stepped in and investigated the company. It uncovered several stock price manipulation strategies supposedly conducted by Tan and his cohorts.

One such strategy was Tan’s sale of his shares to friends and clients at discounted rates. These transactions were then reported to the PSE as twice the amount actually paid. This was made to create an impression that the stock was being traded actively.

It was also found out that the daily turnover of the BW Resources stock circulated among 10 brokerage firms only. In addition, the PSE accused BW Resources of engaging in “wash sales” or a sale transaction wherein the buyer and seller of the stock is the same.

The Updates

In March 2002, charges were filed against Tan and his co-accused before the Pasig RTC. Tan filed a motion to quash on the ground that the Revised Securities Act had already been repealed with the passage of the Securities Regulation Code. The lower court granted Tan’s motion on August 15, 2007.

The other accused subsequently sought the dismissal of the complaints against them considering that they were charged with the same offenses as those filed against Tan. On November 21, 2007, the Pasig RTC granted the motion, prompting the government to elevate the case before the Court of Appeals.

On April 13 2009, the Court of Appeals (CA) reversed the ruling of the lower court dismissing the criminal cases filed against Tan and seven other co-accused.

The CA upheld the charges filed against Tan, Federico Galang, Eduardo Lim Jr., Hermogenes Laddaran, Raul de Castro, Emmanuel Edward Co, Mario Juan and Jimmy Juan in connection with the insider trading and stocks manipulation of BW Resources.

The Name-Changing

blankIn 2000, the BW company changed its name to Fairmont Holdings Inc.. A year later, it changed its name again to Suntrust Home Developers Inc. (Stock Code: SUN) to supposedly reflect a change in the company’s line of business from a holdings firm to real estate development.

At present, major shareholders of Suntrust Home Developers Inc. include Megaworld Properties and Holdings Inc., Hong-Kong based investment firm Emerging Market Assets Limited, Megaworld Corp., and Stanley Ho.

SUN does not offer any product or service but through its wholly-owned subsidiary, First Oceanic Property Management, Inc. (FOPMI), it is engaged in property management of residential and office buildings and private estates.

FOPMI, meanwhile, also has a wholly-owned subsidiary called CityLink Coach Services, Inc., which is engaged in overland transport, carriage, moving or haulage of passengers, fares, customers and commuters as well as freight, cargo, articles, items, parcels, commodities, goods or merchandise by means of coaches, buses, coasters, jeeps, cars and other similar means of transport.

Sources:, GMA News,

James Ryan Jonas teaches business management, investments, and entrepreneurship at the University of the Philippines (UP). He is also the Executive Director of UP Provident Fund Inc., managing and investing P3.2 Billion ($56.4 Million) worth of retirement funds on behalf of thousands of UP employees.