Philippines’ richest man faces scrutiny over empty land 25,000% value gain
The nation’s SEC has fined the company and its senior executives and directors for failing to file financial results on time
[KUALA LUMPUR/MANILA] Nothing about the largely empty stretch of land on the outskirts of Manila hints at how it produced a vast overnight fortune. Or a staggering writedown.
But that’s what unfolded after Manuel Villar, the richest man in the Philippines, moved the land from one part of his corporate group to another and announced its value had shot up to US$23.3 billion, from a mere US$93 million.
The mind-boggling gain, disclosed in March by Villar’s publicly traded Golden MV Holdings, perplexed Manila’s financial community. Auditors balked, regulators halted the stock and opened an investigation, and Golden MV eventually agreed to write down the value by 99 per cent.
“It is entirely ok to have gains moved between entities that are related parties,” said Miguel Angel Minutti-Meza, accounting department chair at the University of Miami’s Herbert Business School. But “it is not clear why this transaction was done and this raises some questions”.
Five months on, the stock still is not trading. Regulators say Golden MV first must submit audited financial results that include the land. The company has said that the audit is underway and that it did not break any rules, but it has left investors guessing about the math.
The episode has triggered fresh scrutiny of the business empire that propelled Villar from the slums to the country’s elite, with a fortune valued by the Bloomberg Billionaires Index at US$22.9 billion. Golden MV, which develops cemeteries, memorial parks and low-cost housing and has less than US$100 million in annual revenue, trades at more than 1,000 times earnings on the Philippine stock exchange. Villar and parties related to him control 89 per cent of the float.
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The nation’s Securities and Exchange Commission (SEC) has fined the company and its senior executives and directors for failing to file financial results on time, and says it’s still considering whether to file criminal charges. Golden MV has appealed.
Last week, after inquiries by Bloomberg News, Villar representatives gave a tour of the land. It’s in the heart of Villar City, the billionaire’s signature real estate project that he kicked off two years ago – and it will play a central role in the project, Golden MV said last year.
Golden MV, which is being renamed Villar Land, declined to answer Bloomberg’s questions about the deal. The company said in filings in recent months that the gain was recorded and disclosed in good faith and that it’s the “protracted review process of the external auditor” that is delaying its financials, rather than neglect or omission by directors or officers.
Villar City
In front of the Brittany Hotel on Manila’s southern edge lies a panorama of bushy plains with a number of roads and residential developments. It’s part of the 366 hectares (904 acres) of land at the centre of the huge gain and subsequent writedown.
The land is part of what the billionaire calls Villar City, a plan to transform a cluster of cities, roughly half the size of Manhattan, into the capital’s “new centre of gravity”. The plans include a university, shopping malls, office buildings and enough housing to boost its population to nine million from about two million currently.
It’s Villar’s capstone project in a career largely built on real estate.
Born in Tondo, a neighbourhood near the city harbour, Villar sold fish and shrimp in the local market to help pay for school. After graduating with an MBA from the University of the Philippines, he bought trucks to haul sand and gravel to construction sites and then moved into homebuilding.
He founded Golden MV in 1982 and grew it into one of the Philippines’ largest chains of cemeteries and memorial parks, a big business in the Catholic country. He also developed affordable housing and later expanded into banking, department stores and supermarkets.
On Sep 30, 2024, Golden MV paid US$93 million to acquire three closely held entities controlled by Villar. Each held bits of the land. The price reflected the entities’ book value – assets minus liabilities – filings show.
Six months later, Golden MV released a preview of its annual results. They included the land valued under the “fair value” accounting method, showing it had shot up 25,000 per cent to US$23.3 billion. The company booked it as a one-time gain, lifting its 2024 net income to US$17.2 billion, a record for the Philippines and beating global giants such as Goldman Sachs and Morgan Stanley.
Fair value
It’s customary for companies to value newly acquired land under the fair value method, said the University of Miami’s Minutti-Meza. The difference between that and book value can be huge, he said, but the figure must be grounded in valuation models and techniques verified by external auditors.
“I do not know why, or who advised them,” Wilson Tan, chairman of the Philippine Financial and Sustainability Reporting Standards Council, said of the paper gain booked by Golden MV. From a technical accounting perspective, the gain might be sound, he said, “but from a business perspective?”
Asset valuation firm EValue Phils, helped Golden MV appraise the land, filings show. But Golden MV’s auditor, a member firm of Grant Thornton International, would not endorse it. EValue declined to comment, while the auditor didn’t respond to a request for comment.
The audit dragged on, preventing Golden MV from filing results for 2024 and the first and second quarter of 2025. The company eventually agreed to value the entities holding the land at-cost, bringing the total value down to US$148 million, according to a regulatory filing.
This prompted more questions. Why would a billionaire who’s been in real estate for decades record a huge gain and then reverse course?
Some analysts said that it may have been a sound move if Villar was looking to issue, sell or pledge shares, or boost Golden MV’s assets to meet loan covenants. But the stock fell after the gain was disclosed, and analysts said banks would be unlikely to take property’s price gain at face value.
Whatever the reason, the restated value of US$148 million is more realistic considering market conditions and the area’s potential, said Sheila Lobien, founder and chief executive officer of real estate consultancy Lobien Realty Group in Manila. “Execution will matter more than headline valuations,” she said.
Golden MV has yet to assuage both its auditor and the SEC. The regulator in August said the company’s release of unaudited financials showed “a clear disregard for its regulatory obligations” and imposed a US$400,000 one-time fine and a smaller daily fee that accumulates until the audited results are submitted.
Golden MV’s appeal is still pending. It has not said when it expects to file its results.
“They are basically saying they cannot be penalised because they acted in good faith because they had to resolve the issue with the external auditor,” said SEC chair Francis Lim. “If you start bending rules because personalities involved are powerful already, our market integrity will always be a dream.” BLOOMBERG
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