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 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 released only 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 No. 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 unwarranted benefits through the transaction.
The complaint, filed anonymously on Nov. 7, 2023, questioned GSIS' subscription to 100 million perpetual preferred shares worth P1.45 billion. It alleged the investment violated the agency's Investment Policy Guidelines (IPG) because the preferred shares were not yet listed on the Philippine Stock Exchange when the agreement was executed, Alternergy allegedly failed to meet the minimum market capitalization requirement, and the investment exceeded the allowable free-float market capitalization limit.
The Ombudsman, however, 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 investment, while eight of the 13 members of the Asset Liabilities Committee favored a resolution affirming its compliance with the IPG. It also said the Risk Oversight Committee endorsed the transaction and that the GSIS Board of Trustees effectively ratified it by recognizing the agency's ownership of the preferred shares, accepting nearly P118 million in dividends in 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 in which some trustees acknowledged that management had entered into the subscription agreement believing it was within its authority. A draft Asset Liabilities Committee resolution was later withdrawn and never formally endorsed by the board.
The panel further held that the relevant IPG provisions were open to varying interpretations, particularly on whether they 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, regardless of whether the securities themselves were listed. He also said the provisions on minimum market capitalization and free-float limits applied only to common shares, not preferred shares.
He added that the investment underwent due diligence, including research and legal review, and fell within his P1.5-billion approval authority under the GSIS Manual of Operations and Control Systems and Administrative Authorities.
The other respondents said their roles were limited to performing official duties, including preparing research memoranda, signing payment documents after internal approvals, and processing payment instructions based on complete documentary requirements.
On the charge under Section 3(e) of Republic Act No. 3019, the Ombudsman 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 generated nearly P118 million in dividends in 2024, and there was no evidence that 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 already produced 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.
