MANILA, Philippines — The Office of the Ombudsman has found Government Service Insurance System (GSIS) President and General Manager Jose Arnulfo A. Veloso and four other officials administratively liable for violating reasonable office rules and regulations over the state pension fund's P1.45-billion investment in renewable energy firm Alternergy Holdings Corporation (AHC).
In a decision dated May 29, 2026 a copy of which was obtained exclusively by The Manila Times, a special panel of prosecutors imposed the penalty of reprimand on Veloso, Executive Vice President Jason Teng, Vice President Mary Abigail Cruz-Francisco, Officer III Jaime Leon Warren, and Acting Officer IV Alfredo Pablo.
The Ombudsman, however, dismissed the more serious administrative charges of Grave Misconduct and Gross Neglect of Duty against the five officials, saying the evidence failed to establish bad faith, corruption, or gross negligence. It also dismissed the complaint against former executive vice president Michael M. Praxedes and former vice president Aaron Samuel C. Chan for lack of jurisdiction after they had left government service.
The administrative case arose from GSIS' purchase of 100 million perpetual preferred shares of Alternergy under a subscription agreement signed on Nov. 7, 2023. GSIS paid the P1.45-billion subscription price on Dec. 15, 2023.
An anonymous complainant alleged that the investment violated the GSIS Investment Policy Guidelines because the preferred shares were not listed on the Philippine Stock Exchange (PSE) when the subscription agreement was executed and because Alternergy allegedly failed to meet the policy's minimum P15-billion market capitalization requirement.
In its ruling, the Ombudsman said the respondents failed to strictly comply with GSIS' internal procedures governing the transaction, making them liable for violating reasonable office rules and regulations.
However, the panel ruled that the evidence did not support the graver charges.
"While there was a failure to strictly observe the GSIS's internal office procedure applicable to the transaction, the evidence on record does not demonstrate bad faith, malicious intent, corruption, or a degree of negligence so gross and reprehensible as to warrant liability for these grave administrative offenses," the decision read.
The Ombudsman also found that there had been substantial compliance with the investment process, noting that the GSIS Board of Trustees acknowledged the transaction during its Dec. 12, 2023 meeting. It likewise noted that GSIS had accepted nearly P118 million in dividend payments from Alternergy without the board adopting any resolution repudiating the investment.
In his defense, Veloso argued that Alternergy was already a publicly listed company and that the investment was authorized under Section 36 of Republic Act No. 8291, the GSIS Act of 1997. He maintained that the Investment Policy Guidelines' requirements on minimum market capitalization and free float applied to common shares and not to the perpetual preferred shares purchased by GSIS.
Veloso also said the transaction underwent due diligence, including evaluations by the Research Office and consultations with the Assets and Liabilities Committee.
The other respondents likewise argued that they merely performed their official duties in processing and approving the investment and that none of them derived any personal benefit from the transaction.
The Ombudsman classified the violation as a light offense punishable by reprimand. According to the decision, the respondents have already served the penalty.
The ruling also comes after the Ombudsman had lifted the preventive suspension imposed on Veloso and the other respondents, allowing them to return to their posts while the administrative case was pending.
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