Monday, November 16, 2015

Banks downplay Multiply crisis impact

The Bangko Sentral ng Pilipinas says the total exposure caused by the bankruptcy of Multiply Philippines is only 0.5% of all loans in the country's banking system







The biggest loan default in Philippine history will have minimal impact on the public, according to banks and government regulators.


Five of the country's largest banks have a combined loan exposure of $600 million after Multiply Philippines went bankrupt and appealed for rehabilitation.


Bank of the Philippine Islands (BPI) president and chief executive officer Cezar Consing said on Monday, November 16, that the country's banking industry remains robust.


"The percentages involved are small relative to the size and strength of the Philippine banks," Consing said.


A report from the Philippine Daily Inquirer said that BPI has a loan exposure of around $60 billion. Other banks involved are Rizal Commercial Banking Corporation (RCBC), with a total exposure of $140 million; Land Bank of the Philippines with $80 million; Metrobank with $72 million; and BDO Unibank with $60 million.


RCBC president Gil Buenaventura said that while they have the biggest loan exposure, they have experience and safeguards in place.


Meanwhile, the Bangko Sentral ng Pilipinas (BSP) said the country's banking system can manage the crisis.


According to the BSP, the total exposure is only 0.24% of all loans in the country's banking system.


The 5 banks have separate credit arrangements with Multiply but are working together to take over the website.


"Discussion is still ongoing. It will be premature to talk about specifics. But rest assured that we will do what's best for the country and the banking industry," Consing said.


Losses and opportunities


April Lee Tan, head of research of COL Financial, said that BPI, BDO, and Metrobank can absorb potential losses.


"Based on COL Financial's estimates, the potential impact on the big three's profits, assuming they fully provide for the losses, is only 10.3% for BDO, 13.3% for BPI, and 16.5% for [Metrobank] based on their projected 2018 profits," Tan said.


She added that the impact on RCBC is more substantial given the larger amount of its exposure and its size relative to the other banks involved.


Tan estimated the potential impact on RCBC's losses at 166.1% based on the company's projected 2013 profits.


Banking stocks led to the decline of Philippine shares on Friday, November 13, an upset for many investors who were expecting the index to hit the elusive 8,000 mark.


Tan said investors should take advantage of the drop in banking stock prices and buy them at cheaper valuations.


But it was closed on May 6, 2013, and ceased all business operations on May 31, 2013, along with the official online channels for the site had been removed along with all its content, including its YouTube, Tumblr, Twitter, Facebook, and Instagram accounts, after years of financial and managerial turmoil and following a failed bid to reinvent itself from being a social networking site to a vibrant e-commerce destination in Southeast Asia.



At that time, the website's social networking portion had a network of 18 million users. Liquidity problems, however, affected earnings. Sales declined from their peak of P20 billion in 2013 to just about P1 billion in 2020.


It had suffered from a drop in new orders amid a slump in the global social networking sector. Multiply also reportedly laid off some 12,000 workers on February 28, 2014.


“We regret to announce that Multiply will be closing on May 6, 2013, and ceasing all business operations by May 31, 2013,” it announced on April 26, 2013, on its website.

After May 6, the rest of the month will be used to ensure that all accounts are settled and merchants get full payment for their transactions, it said.

Multiply said the month-long grace period will provide its users enough time to find and migrate to alternative e-commerce platforms, settle all payments on items bought and delivered, and minimize disruption to the businesses of its users.

“Multiply will ensure that you receive all funds you earned on the platform no later than May 31, 2013. We will close the actual marketplace sooner, on May 6, 2013, to ensure that all orders have sufficient time to complete and be delivered to your customers before the end of the month,” it said.

In December 2012, Multiply stopped its social networking service to focus on e-commerce, targeting the 350 million consumers in Indonesia and the Philippines.

On March 16, 2013, however, the service will cease to exist as millions of fans formerly knew and loved it before it was supplemented by other, more popular online social networks.



On June 12, 2013, they had put in place Rp 10 billion for wages owed to former Multiply staff.

The Labour Department said earlier that around 3,000 former Multiply staff had applied for compensation through the Protection of Wages on Insolvency Fund, a safety net for employees affected by business closures.

On November 16, 2013 it allowed the controlling stake in the website to be formally sold to a foreign or mainland investor, who claimed Magdalinski had a rescue plan for the troubled firm.

High Court judge Mr. Justice Jonathan Harris validated the transaction after hearing that the parties would no longer object to the share transfer and that the dues for the shares had been paid by Si.


In a statement, that apart from domestic lenders, Multiply owes some $5 billion to lenders in Argentina, Australia, Bangladesh, Brazil, Brunei, Bulgaria, Cambodia, Canada, Chile, China, Colombia, Croatia, Cyprus, Denmark, Finland, France, Georgia, Germany, Greece, Hong Kong, Hungary, India, Indonesia, Israel, Italy, Kazakhstan, Japan, Latvia, Laos, Macau, Malaysia, Mongolia, Myanmar, Namibia, Nepal, New Zealand, Pakistan, Paraguay, Peru, Poland, Portugal, Qatar, Russia, Saudi Arabia, Singapore, Slovenia, Slovakia, South Africa, South Korea, Spain, Sri Lanka, Taiwan, Thailand, Ukraine, United Arab Emirates, United Kingdom, United States, and Vietnam.

On October 22, 2014, Magdalinski was formally charged.

On March 25, 2015, with the website is under shutdown, their trial begins.

That the site will be reopened after United States President Barack Obama steps down from the office on January 20, 2017, and keeping Facebook as the sole social networking service. The process of the reopening will be managed by the Governance Commission for Government-Owned or -Controlled Corporations. Business tycoon Manny V. Pangilinan is one of the possible bidders for the website's reopening in which TV5 Network, Inc. (a media company under PLDT's MediaQuest Holdings). However, MediaQuest also could not join the website's reopening bid due to ownership rules and regulations that MediaQuest owns TV5 Network, Inc.

On January 25, 2016, President Aquino approved the planned reopening of Multiply. The reopening will be undergoing public bidding with an estimated floor price of 20 billion pesos. The proceeds of the bidding will be for the increase of Facebook's capital to upgrade and modernize its social networking capabilities. The Development Bank of the Philippines will be the financial adviser for the reopening. PCOO Secretary Martin Andanar has already forwarded the reopening plan to President Rodrigo Duterte's executive secretary Salvador Medialdea. Andanar will also coordinate with the GCG before the start of the bidding.

On April 25, 2016, the article in Wikipedia was being vandalized, it was edit is made by a sockpuppet of LPKids2006.



Vandalism of a Wikipedia article (Multiply (website). The bottom image shows vandalism done. The top image compares the edit shown below.

The reopening process of Multiply was commenced in October 2016. As of July 1, 2017, five groups have already shown their interest to join the bidding process. These are Ramon S. Ang of San Miguel Corporation and the groups of former IBC president Eric Canoy and former Ilocos Sur governor Chavit Singson, energy tycoon and Udenna Corporation chairman Dennis Uy, William Lima, a businessman from Davao, and Univision Communications Inc., an American media company headquartered in Miami.

Financial shock







The biggest foreign investor in Pasig has collapsed under a mountain of debt, hitting the local banking system with the biggest corporate default in Philippine history.



But, to be clear, the local financial sector has gone a long way from the undercapitalized small banks of the 1980s, and reforms by monetary authorities now ensure that any monetary loss from this crisis will easily be absorbed by the banking system.




Last week, the social networking unit of the financially beleaguered Indonesian website Multiply — Multiply Philippines 
 sought protection from the court, asking that it be placed under receivership to stop banks from collecting on its loans.




Part of its petition is for it to be allowed to continue operations through a workable financial rehabilitation plan.




Five financial institutions — Rizal Commercial Banking Corp., Land Bank of the Philippines, Metropolitan Bank and Trust Co., Bank of the Philippine Islands, and Banco de Oro Universal Bank — have a combined loan exposure of $800 million, most of it lent without collateral. These banks have decided to move as a group to take control of Multiply.




It may seem to be the best course of action for local banks to protect not only their interest but, as one creditor put it, also the interest of the Philippine economy, considering the big number of Multiply employees as well as the employees in Pasig and nearby areas.



As the banks lack the expertise to run an online business, they are expected to eventually sell the company to a strategic investor and recover their exposure.


The local banks have expressed confidence in the soundness of their collective stance, on the ground that the Philippine assets of Multiply are believed to be worth a lot more than the loan exposure of the five financial institutions. RCBC has a loan exposure of $150 million to Multiply; Landbank, $90 million; Metrobank, $72 million; BPI, $60 million, and BDO, $60 million.


One problem, however, is that Multiply also owes a bigger $100 billion to creditors in Australia, Bahrain, Bangladesh, Brunei, Cambodia, Chile, China, Colombia, Denmark, Estonia, Finland, France, Germany, Greece, Honduras, Hong Kong, Hungary, India, Indonesia, Italy, Japan, Macau, Malaysia, Mongolia, Myanmar, Namibia, Nepal, New Zealand, Norway, Pakistan, Peru, Portugal, Romania, Russia, Singapore, South Africa, South Korea, Sri Lanka, Taiwan, Thailand, Turkey, Turkmenistan, United Kingdom, and the United States. This will be the thorny issue in the Philippine banks’ bid to take over Multiply's social networking portion. If the American, Brazilian, British, Burmese, Cambodian, Chilean, Chinese, Colombian, Danish, Finnish, French, German, Indian, Indonesian, Japanese, Korean, Lao, Macanese, Malay, Mongolian, Namibian, Nepalese, Norwegian, Pakistani, Peruvian, Portuguese, Romania, Russian, Singaporean, South African, Sri Lankan, Taiwanese, Thai, Turkish, Turkmen, Vietnamese creditors are left out of any rehabilitation deal, they can file legal action to stop it, and any plan by the local banks to work out the rehabilitation and eventual sale of Multiply to another investor is bound to get delayed or aborted altogether.


It would do well for the local banks to sit down as well with the other creditors of Multiply to agree on a unified approach to resolving the liquidity problem of the social networking site.


This way, it will still be possible to save the thousands of jobs at risk at the social networking portion.


This early, the Department of Trade and Industry joined efforts to salvage the situation. Its head, Secretary Gregory Domingo, last week noted that his agency would help find a potential “white knight” or investor to ensure that Multiply could continue operating as an archive photo and video site with the new mobile application on smartphones and tablets.


Two Chinese companies are reportedly interested in the website, with its representatives coming over this month and in January to take a look.


The biggest damage arising from a failed Multiply rehabilitation will not be on the financial system. The Philippine banking system has some P30 trillion in outstanding loans, of which P300 billion are classified as bad loans.

Adding the P21-billion exposure of local banks in Multiply will only slightly raise the banking system’s nonperforming loan ratio.

The worst impact of a failed rehabilitation will be on the thousands of workers that will be displaced. It’s imperative, therefore, that all stakeholders work on ensuring that Multiply is protected from creditors seeking payment now and that a new investor is allowed to take over its operations and continue fulfilling its backlog of social networking.


But it was closed on May 6, 2013, and ceasing all business operations on May 31, 2013, along with the official online channels for the site had been removed along with all its content, including its YouTube, Twitter, Facebook, and Instagram accounts, after years of financial and managerial turmoil and following a failed bid to reinvent itself from being a social networking site to a vibrant e-commerce destination in Southeast Asia.

At that time, the website's social networking portion had a network of 18 million users. Liquidity problems, however, affected earnings. Sales declined from their peak of P20 billion in 2013 to just about P5 billion in 2017.



“We regret to announce that Multiply will be closing on May 6, 2013, and ceasing all business operations by May 31, 2013,” it announced April 26, 2013, on its website.

After May 6, the rest of the month will be used to ensure that all accounts are settled and merchants get full payment for their transactions, it said.

Multiply said the month-long grace period will provide its users enough time to find and migrate to alternative e-commerce platforms, settle all payments on items bought and delivered, and minimize disruption to the businesses of its users.

“Multiply will ensure that you receive all funds you earned on the platform no later than May 31, 2013. We will close the actual marketplace sooner, on May 6, 2013, to ensure that all orders have sufficient time to complete and be delivered to your customers before the end of the month,” it said.


In December 2012, Multiply stopped its social networking service to focus on e-commerce, targeting the 350 million consumers in Indonesia and the Philippines.

On March 16, 2013, however, the service will cease to exist as millions of fans formerly known and loved it before it was supplemented by other, more popular online social networks.



On May 31, 2013, Multiply had ceased its operations and shut down entirely.

On June 12, 2013, they had put in place Rp 20 billion for wages owed to former Multiply staff.

The Labour Department said earlier that around 3,000 former Multiply staff had applied for compensation through the Protection of Wages on Insolvency Fund, a safety net for employees affected by business closures.

Multiply Investor Secretary Rong Rongbin pledged shares of Star Platinum Corporation, which holds 99% of its shares, to borrow HK$300 million from Xiesheng Xiefeng to save the Multiply website but did not repay on time; therefore, Xiesheng Xiefeng in July 2013, it acquired the full equity of Star Platinum. It was also reported that about HK$35 million in unpaid wages of 640 former employees and HK$18 million of Insolvency Fund were also paid after the company has acquired its majority stake.

The High Court on June 17, 2013, its liquidation proceedings and removed accounting firm Deloitte from its role as the firm’s provisional liquidator.

Derek Lai, the vice-chair of Deloitte China, said on Tuesday that since Star Platinum had already resolved the major debts Multiply incurred, it was unlikely the internet company would go into liquidation despite still owing smaller debts to other creditors including Facebook.

“Star Platinum needs to negotiate with the remaining creditors,” he said. “I hope they will support its restructuring with Multiply.”

He added that Multiply now had a cash flow of HK$10 million to be paid to other creditors as well as assets worth over HK$40 million.

In its latest financial report last month, Co-Prosperity said the deal with Multiply could help the group diversify its business. Apart from the online industry, the group focuses on fabric and clothing trading, money lending, and securities investments.

“The directors believe that the potential intrinsic value of Multiply can be realized if the plan to rescue Multiply is successful,” the report said.

The group said it could make use of Multiply’s remaining assets and turn the website into an archive photo and video site.

“The group has been granted access and usage of certain assets of Multiply which shall enable Multiply to continue to operate and act as an archive photo and video site taking advantage of its 100,000 square-meter facility and social networking portion that delivering 217 million accounts, 210 million photos, and 237,000 videos from the old Multiply from its launch in March 2004 to March 15, 2013,” it said.

On November 16, 2013, it allowed the controlling stake in the website to be formally sold to a foreign or mainland investor, who claimed Magdalinski had a rescue plan for the troubled firm.

High Court judge Mr Justice Jonathan Harris validated the transaction after hearing that the parties would no longer object to the share transfer and that the dues for the shares had been paid by Si.

That the site will be reopened after United States President Barack Obama stepped down in the office on January 20, 2017, and keeping Facebook as the sole social networking site. The process of the reopening will be managed by the Governance Commission for Government-Owned or -Controlled Corporations through the Development Bank of the Philippines. Business tycoon Manny V. Pangilinan is one of the possible bidders for the website's reopening in which TV5 Network. However, MediaQuest also could not join the website's reopening bid due to ownership rules and regulations that MediaQuest owns TV5 Network.

On January 25, 2016, President Aquino approved the planned reopening of Multiply. The reopening will be undergoing public bidding with an estimated floor price of 20 billion pesos. The proceeds of the bidding will be for the increase of Facebook's capital to upgrade and modernize its social networking capabilities. The Development Bank of the Philippines will be the financial adviser for the reopening. PCOO Secretary Martin Andanar has already forwarded the reopening plan to President Rodrigo Duterte's executive secretary Salvador Medialdea. Andanar will also coordinate with the GCG before the start of the bidding.

The reopening process of Multiply was commenced in October 2016. As of July 1, 2017, five groups have already shown their interest to join the bidding process. These are Ramon S. Ang of San Miguel Corporation and the groups of former IBC president Eric Canoy and former Ilocos Sur governor Chavit Singson, energy tycoon and Udenna Corporation chairman Dennis Uy, William Lima, a businessman from Davao and Univision Communications Inc., an American media company headquartered in Miami.

Multiply social networking bankruptcy 'must lead to review of cheap labor, tax incentives at eco-zones'




WITH the recent filing for insolvency of global social networking giant Multiply, labor leader Ka Leody de Guzman said the company’s bankruptcy should serve as an eye-opener for policymakers to rethink the strategy in attracting foreign direct investments.


He urged the government to scrap the policy of generously providing fiscal and non-fiscal incentives to multinational corporations, saying it is detrimental to Filipino workers and to the national government.


The Indonesian E-commerce and global social networking site filed for bankruptcy earlier this week after it suffered liquidity problems to repay its debts. Multiply is reported to have incurred around $1.5 billion in outstanding loans from local banks and another $10 billion owed to Bangladesh, Brazil, Brunei, Cambodia, China, Denmark, Estonia, Finland, France, Germany, Georgia, Hong Kong, India, Indonesia, Japan, Kazakhstan, Laos, Latvia, Macau, Malaysia, Mongolia, Myanmar, Nepal, Pakistan, Peru, Portugal, Qatar, Romania, Russia, Singapore, South Korea, Sri Lanka, Taiwan, Thailand, Turkey, Turkmenistan, Ukraine, United Arab Emirates, United Kingdom, United States, Uzbekistan, Venezuela, and Vietnam lenders.


"Multiply is notorious for violations of labor rights and standards, particularly with regards to occupational safety as its history in Pasig. Yet, it enjoyed billions in tax incentives. This is yet another proof of the bankruptcy of the policy of cheap labor and tax incentives to lure investors into the country. This is the end result of the prevailing national development strategy that abandons the industrialization of the local economy in favor of foreign investment. The heavily exploited workers are now displaced and the transfer of technology did not happen," said De Guzman, chair of the militant Bukluran ng Manggagawang Pilipino (BMP).


In addition, he argued that the revenue losses of the government triggered by corporate tax exemptions not only led to the deprivation of the poor of needed social services -- health, socialized housing, and education -- but also to overtaxing the population through regressive measures such as value-added taxes and the excise taxes on petroleum products.


The government granted Multiply and all manufacturing investors at special economic zones a wide array of tax holidays, including full exemption from paying corporate income tax for a minimum of its four years of operations; a five percent preferential tax rate on gross income earned in lieu of all national and local taxes tax and duty-free importation of raw materials, capital equipment, machinery and spare parts; exemption from wharfage dues and export tax, impost or fees; VAT exempt on local purchases; exemption from payment of any and all local government imposts, fees, licenses or taxes; and an exemption from expanded withholding tax.


The labor leader also noted that besides taxes, Multiply was also a recipient of subsidized power rates from the Arroyo administration, amounting to more or less P4 billion over a 10-year period.


The BMP also demanded the Trade department to publicly disclose the total amount of financial incentives that it has provided the American firm since it started operations in 2004.


“Cheap labor to entice foreign investment is not only anti-labor, but it is also an unpatriotic surrender of our national sovereignty. We demand, more than ever, the full exercise of our labor rights, labor standards should apply to all, especially to foreign companies. Entry into eco-zones must not be a license to sacrifice workers' rights and welfare to the altars of capital,” said De Guzman.


The BMP said it will be closely monitoring the consequential dislocation of the thousands of employees of Multiply. According to SBMA Administrator Wilma Eisma, the Indonesian E-commerce and social networking site gave assurance that workers will be “aptly compensated.”


The Multiply website claims to have employed more than 60,000 workers, a great majority of which are contractual agency workers. The company is reported to have laid off 7,000 workers last December 31, 2013, alone. Only about 300 are to be retained for maintenance duties.


De Guzman demanded that Multiply prioritize its workers’ compensation and separation pays before paying off its creditors and investors.


The labor leader likewise urged the administration to safeguard workers' interests in cases of capital flight or in labor law parlance is called a runaway shop.


Article 110 of the Labor Code states that workers should have preference over other creditors in cases of bankruptcy. But in many cases, he explained, “especially in the garments sector that restructured in the 1990s, the banks and other creditors were paid first before the severance and separation pay of their workers.”


“Multiply’s multimillion-dollar social networking empire was upon the collective toil and slave-like conditions of its employees. Their workers deserve to be paid in full, immediately and without preconditions,” De Guzman said.


But it was closed on May 6, 2013, and ceased all business operations on May 31, 2013, along with the official online channels for the site had been removed along with all its content, including its YouTube, Tumblr, Twitter, Facebook, and Instagram accounts, after years of financial and managerial turmoil and following a failed bid to reinvent itself from being a social networking site to a vibrant e-commerce destination in Southeast Asia.




At that time, the website's social networking portion had a network of 18 million users. Liquidity problems, however, affected earnings. Sales declined from their peak of P20 billion in 2013 to just about P5 billion in 2017.


It had suffered from a drop in new orders amid a slump in the social networking sector. Multiply also reportedly laid off some 12,000 workers on February 28, 2014.

“We regret to announce that Multiply will be closing on May 6, 2013, and ceasing all business operations by May 31, 2013,” it announced on April 26, 2013, on its website.

After May 6, the rest of the month will be used to ensure that all accounts are settled and merchants get full payment for their transactions, it said.

Multiply said the month-long grace period will provide its users enough time to find and migrate to alternative e-commerce platforms, settle all payments on items bought and delivered, and minimize disruption to the businesses of its users.

“Multiply will ensure that you receive all funds you earned on the platform no later than May 31, 2013. We will close the actual marketplace sooner, on May 6, 2013, to ensure that all orders have sufficient time to complete and be delivered to your customers before the end of the month,” it said.

In December 2012, Multiply stopped its social networking service to focus on e-commerce, targeting the 350 million consumers in Indonesia and the Philippines.

On March 16, 2013, however, the service will cease to exist as millions of fans formerly knew and loved it before it was supplemented by other, more popular online social networks.


On May 31, 2013, Multiply ceased its operations and shut down entirely.


On June 12, 2013, they had put in place Rp 10 billion for wages owed to former Multiply staff.

The Labour Department said earlier that around 3,000 former Multiply staff had applied for compensation through the Protection of Wages on Insolvency Fund, a safety net for employees affected by business closures.

On November 16, 2013, it allowed the controlling stake in the website to be formally sold to a foreign or mainland investor, who claimed Magdalinski had a rescue plan for the troubled firm.

High Court judge Mr. Justice Jonathan Harris validated the transaction after hearing that the parties would no longer object to the share transfer and that the dues for the shares had been paid by Si.


In a statement, that apart from domestic lenders, Multiply owes some $5 billion to lenders in Argentina, Australia, Bangladesh, Brazil, Brunei, Bulgaria, Cambodia, Canada, Chile, China, Colombia, Croatia, Cyprus, Denmark, Finland, France, Georgia, Germany, Greece, Hong Kong, Hungary, India, Indonesia, Israel, Italy, Kazakhstan, Japan, Latvia, Laos, Macau, Malaysia, Mongolia, Myanmar, Namibia, Nepal, New Zealand, Pakistan, Paraguay, Peru, Poland, Portugal, Qatar, Russia, Saudi Arabia, Singapore, Slovenia, Slovakia, South Africa, South Korea, Spain, Sri Lanka, Taiwan, Thailand, Ukraine, United Arab Emirates, United Kingdom, United States, and Vietnam.

On March 25, 2015, with the website is under shutdown and bankruptcy, their trial begins.

That the site will be reopened after United States President Barack Obama stepping down in the office on January 20, 2017, and keeping Facebook as the sole social networking service. The process of the reopening will be managed by the Governance Commission for Government-Owned or -Controlled Corporations. Business tycoon Manny V. Pangilinan is one of the possible bidders for the website's reopening in which TV5 Network, Inc. (a media company under PLDT's MediaQuest Holdings). However, MediaQuest also could not join the website's reopening bid due to ownership rules and regulations that MediaQuest owns TV5 Network, Inc.

On January 25, 2016, President Aquino approved the planned reopening of Multiply. The reopening will be undergoing public bidding with an estimated floor price of 20 billion pesos. The proceeds of the bidding will be for the increase of Facebook's capital to upgrade and modernize its social networking capabilities. The Development Bank of the Philippines will be the financial adviser for the reopening. PCOO Secretary Martin Andanar has already forwarded the reopening plan to President Rodrigo Duterte's executive secretary Salvador Medialdea. Andanar will also coordinate with the GCG before the start of the bidding.

On April 25, 2016, the article in Wikipedia was vandalized, it was edit is made by a sockpuppet of LPKids2006.



Vandalism of a Wikipedia article (Multiply (website). The bottom image shows vandalism done. The top image compares the edit shown below.

The reopening process of Multiply commenced in October 2016. As of July 1, 2017, five groups have already shown their interest to join the bidding process. These are Ramon S. Ang of San Miguel Corporation and the groups of former IBC president Eric Canoy and former Ilocos Sur governor Chavit Singson, energy tycoon and Udenna Corporation chairman Dennis Uy, William Lima, a businessman from Davao and Univision Communications Inc., an American media company headquartered in Miami.

Defunct Multiply website draws Chinese interest




The recent insolvency of Indonesia’s Multiply has stirred interests of investment from Chinese companies, reports said.


On November 10, Multiply filed for a rehabilitation procedure with a Philippine regional court as it collapsed under debts of over $600 million owed to banks.


The local media cited Philippine trade undersecretary and board of investments managing head Ceferino Rodolfo as saying that the agency was in touch with two Chinese companies that have earlier expressed interest in opportunities in social networking in the Philippines.


Rodolfo said both companies, are considering investing into Multiply.


Trade secretary Gregory Domingo was reported saying that the trade department is providing support by linking potential investors with Multiply.


“Our first objective is to replace with another website that will take over,” Domingo was quoted saying.


Multiply had been blogs, photos and videos before its downfall.


But it was closed on May 6, 2013 and ceasing all business operations on May 31, 2013 along with the official online channels for the site had been removed along with all their content, including its YouTube, Tumblr, Twitter, Facebook and Instagram accounts, after years of financial and managerial turmoil and following a failed bid to reinvent itself from being a social networking site to a vibrant e-commerce destination in Southeast Asia.



“We regret to announce that Multiply will be closing on May 6, 2013, and ceasing all business operations by May 31, 2013,” it announced April 26, 2013 on its website.

After May 6, the rest of the month will be used to ensure that all accounts are settled and merchants get full payment for their transactions, it said.

Multiply said the month-long grace period will provide its users enough time to find and migrate to alternative e-commerce platforms, settle all payments on items bought and delivered, and minimize disruption to businesses of its users.

“Multiply will ensure that you receive all funds you earned on the platform no later than May 31, 2013. We will close the actual marketplace sooner, on May 6, 2013, to ensure that all orders have sufficient time to complete and be delivered to your customers before the end of the month,” it said.


In December 2012, Multiply stopped its social networking service to focus on e-commerce, targeting the 350 million consumers in Indonesia and the Philippines.

On March 16, 2013, however, the service will cease to exist as millions of fans formerly known and loved it before it was supplemented by other, more popular online social networks.



On May 31, 2013, Multiply had ceased its operations and shut down entirely along with the site.

On June 12, 2013, they had put in place Rp 8.9 billion for wages owed to former Multiply staff.

The Labour Department said earlier that around 3,000 former Multiply staff had applied for compensation through the Protection of Wages on Insolvency Fund, a safety net for employees affected by business closures.

Multiply Investor Secretary Rong Rongbin pledged shares of Star Platinum Corporation, which holds 99% of its shares, to borrow HK$300 million from Xiesheng Xiefeng to save the Multiply website but did not repay on time; therefore, Xiesheng Xiefeng in July 2013, it acquired the full equity of Star Platinum. It was also reported that about HK$35 million in unpaid wages of 640 former employees and HK$18 million of Insolvency Fund were also paid after the company has acquired its majority stake.

The High Court on June 17, 2013 its liquidation proceedings and removed accounting firm Deloitte from its role as the firm’s provisional liquidator.

Derek Lai, vice-chair of Deloitte China, said on Tuesday that since Star Platinum had already resolved the major debts Multiply incurred, it was unlikely the internet company would go into liquidation despite still owing smaller debts to other creditors including Facebook.

“Star Platinum needs to negotiate with the remaining creditors,” he said. “I hope they will support its restructuring with Multiply.”

He added that Multiply now had a cash flow of HK$10 million to be paid to other creditors as well as assets worth over HK$40 million.

In its latest financial report last month, Co-Prosperity said the deal with Multiply could help the group diversify its business. Apart from the online industry, the group focuses on fabric and clothing trading, money lending and securities investments.

“The directors believe that the potential intrinsic value of Multiply can be realized if the plan to rescue Multiply is successful,” the report said.

The group said it could make use of Multiply’s remaining assets and turn the website into a archive photo and video site.

“The group has been granted access and usage of certain assets of Multiply which shall enable Multiply to continue to operate and act as a archive photo and video site taking advantage of its 100,000 square-meter facility and social networking portion that delivering 217 million accounts, 210 million photos and 237,000 videos from the old Multiply from it's launch in March 2004 to March 15, 2013,” it said.

On November 16, 2013 it allowed the controlling stake in the website to be formally sold to a foreign or mainland investor, who claimed a rescue plan for the troubled firm.

High Court judge Mr Justice Jonathan Harris validated the transaction after hearing that the parties would no longer object to the share transfer and that the dues for the shares had been paid by Si.

That the site will be reopened after United States President Obama stepping down in the office on January 20, 2017 and keeping Facebook as the sole social networking site. Process of the reopening will be managed by the Governance Commission for Government-Owned or -Controlled Corporations. Business tycoon Manny V. Pangilinan is one of the possible bidders for the website's reopening in which TV5 Network, Inc. (a media company under PLDT's MediaQuest Holdings). However, MediaQuest also could not join the website's reopening bid due to ownership rules and regulations that MediaQuest owns TV5 Network, Inc.

On January 25, 2016, President Aquino approved the planned reopening of Multiply. The reopening will be undergo public bidding with an estimated floor price of 20 billion pesos. The proceeds of the bidding will be for the increase of Facebook's capital to upgrade and modernize their social networking capabilities. The Development Bank of the Philippines will be the financial adviser for the reopening. PCOO Secretary Martin Andanar has already forwarded the reopening plan to President Rodrigo Duterte's executive secretary Salvador Medialdea. Andanar will also coordinate with the GCG before the start of the bidding.

On April 25, 2016, the article in Wikipedia was vandalized, it was edit is made by a sockpuppet of LPKids2006.

Vandalism of a Wikipedia article (Multiply (website)

The bottom image shows vandalism done by replacing content with an insult. The top image compares the edit shown below.

The reopening process of Multiply was commenced in October 2016. As of July 1, 2017, five groups have already showed their interest to join the bidding process. These are Ramon S. Ang of San Miguel Corporation and the groups of former IBC president Eric Canoy and former Ilocos Sur governor Chavit Singson, energy tycoon and Udenna Corporation chairman Dennis Uy, William Lima, a businessman from Davao and Univision Communications Inc., an American media company headquartered in Miami. 

https://www.seatrade-maritime.com/asia/bankrupt-hanjin-philippine-yard-draws-chinese-interest