THE Office of the Ombudsman has dismissed the criminal complaint against Government Service Insurance System (GSIS) President and General Manager Jose Arnulfo Veloso and six other officials over the state pension fund’s P1.45 billion investment in Alternergy Holdings Corp. (AHC), ruling that there was no probable cause to charge them with violations of the Anti-Graft and Corrupt Practices Act.
In a 27-page resolution dated May 29, 2026, but only made public on Tuesday, the Ombudsman’s Special Panel of Prosecutors found no basis to indict Veloso, Executive Vice Presidents Jason Teng and Michael Praxedes, Vice Presidents Mary Abigail Cruz-Francisco and Aaron Samuel Chan, Officer III Jaime Leon Warren, and Acting Officer IV Alfredo S.S. Pablo for alleged violations of Sections 3(e), 3(g), and 3(j) of Republic Act 3019.
The panel said the evidence failed to show that the respondents acted with manifest partiality, evident bad faith or gross inexcusable negligence; caused undue injury to the government; or gave Alternergy any unwarranted benefit through the transaction.
The complaint, filed anonymously on Nov. 7, 2023, questioned GSIS’ subscription to 100 million perpetual preferred shares of AHC worth P1.45 billion.
The complainant alleged that the investment violated the agency’s Investment Policy Guidelines (IPG) because the preferred shares had not yet been listed on the Philippine Stock Exchange when the agreement was executed, Alternergy failed to meet the minimum market capitalization requirement, and the investment exceeded the allowable free-float market capitalization limit.
In dismissing the complaint, the Ombudsman said the transaction substantially complied with GSIS’ internal approval process and that the respondents acted in good faith based on legal and technical opinions issued within the agency.
The resolution noted that the Financial Management Group supported the transaction, while eight of the 13 members of the Asset Liabilities Committee favored a resolution confirming its compliance with the IPG.
It added that the Risk Oversight Committee endorsed the investment and that the GSIS Board of Trustees effectively ratified the transaction by recognizing the agency’s ownership of the preferred shares, accepting nearly P118 million in dividends for 2024, and taking no action to repudiate the investment or sanction the officials involved.
The Ombudsman also cited discussions during a Dec. 12, 2025, board meeting, where some trustees acknowledged that management had already entered into the subscription agreement, believing it was within its authority.
A draft Asset Liabilities Committee resolution was later withdrawn and was never formally endorsed by the board.
The panel further held that the relevant provisions of the IPG were susceptible to different interpretations, particularly on whether the requirements applied to preferred or common shares and to listed or unlisted securities.
The respondents maintained that the investment complied with existing policies.
Veloso argued that Alternergy was already a publicly listed company and that the IPG allowed GSIS to invest in securities issued by listed companies, whether or not the securities themselves were listed.
He also maintained that the IPG provisions on minimum market capitalization and free-float limits applied only to common shares, not preferred shares.
He said the investment underwent due diligence, including research and legal review, and was within his P1.5-billion approval authority under the GSIS Manual of Operations and Control Systems and Administrative Authorities.
The other respondents said their participation was limited to their respective official duties, including preparing research memoranda, signing payment documents after internal approvals had been secured, and processing payment instructions based on completed documentary requirements.
On the charge under Section 3(e) of Republic Act 3019, the Ombudsman ruled that prosecutors found no evidence of manifest partiality, evident bad faith or gross inexcusable negligence.
The resolution said Veloso’s reliance on Chan’s legal and research memoranda demonstrated good faith.
It also found that the government suffered no undue injury because the investment had already generated nearly P118 million in dividends in 2024 and that no evidence showed the respondents received any personal or pecuniary benefit from the transaction.
“Not all transgressions of the rules automatically result to a criminal offense,” the resolution said, citing Supreme Court jurisprudence.
The panel likewise dismissed the allegation under Section 3(g), ruling that the subscription agreement was not grossly and manifestly disadvantageous to the government because the cumulative preferred shares gave GSIS priority over common shareholders in dividend payments and had alreadyproduced substantial returns.
It also ruled that Section 3(j) did not apply because the subscription agreement was purely contractual and did not involve the grant of a license, permit, privilege or regulatory benefit. Franco Jose Baroña
