The arithmetic of Lucio Tan

How Lucio Tan came to own and disown the Philippine National Bank.

That Lucio Tan cannot evaluate the Black-Scholes formula is disappointing that he has enough money to buy the Philippine National Bank is enviable that he knows arithmetic better than the wizards of the Philippine Department of Finance is genius.

The story begins in September 1999 when PNB, the countrys fifth biggest bank, began widening its capital base with a stock rights offering. The Philippine government with its 45.6% equity ownership decided not to exercise its preemptive rights as it would have cost Ps4.3 billion $93.6 million. Besides, the objective is to privatize the former official depository of the government so it would have been inconsistent to throw government cash back...

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