BSP files criminal case against Prime Bank officials

The Bangko Sentral ng Pilipinas (BSP) has finally filed with the Department of Justice criminal cases against officials of Prime Savings Bank for violation of Section 35 of Republic Act No. 7653 (the New Central Bank Act).

The charges were filed against Prime Savings Bank president Apolinario Antonio; Domingo Meneses, senior vice president and comptroller; and Benedicto Guño, assistant vice president.

BSP said that based on affidavit and other supporting documents, the Prime Savings Bank officials "wilfully made and submitted to the BSP false and misleading satements on the true financial condition of Prime Savings Bank, which is now under the receivership of the Philippine Deposit Insurance.

Under Sec. 35 of the BSP charter, the wilful making of a false or misleading statement on a material fact to the Monetary Board or the BSP examiners is punishable by a fine of not less than P100,000 nor more than P200,000, or by imprisonment of not more than five years or both, at the discretion of the court.

Based on BSP findings Meneses signed and submitted to the BSP a consolidated statement of income and expense of Prime Savings Bank as of Sept. 30, 1998 which reflected an interest income of P107.80 million on loans and interest expenses of P3.366 million on deposits.

According to the BSP, the interest income of P107.08 for September 1998 was unusually high while the interest expense for the same month was unusually low.

The BSP found the explanations of Antonio, Meneses and Guño on the sudden increase of the interest income for September 1998 and the sharp decrease of interest expense for the same month to be false, misleading and unfounded because the subsidiary ledgers support the unusually high interest income and unusually low interest expense.

The BSP added further that Meneses also signed and submitted to the BSP a consolidated statement of condition of Prime Savings Bank as of Nov. 26, 1998 which reflected an "accrued interest receivable" in the sum of P55,654,142.27 and another consolidated statement of condition as of Nov. 25, 1998 which showed an "accrued interest receivable' of only P5,437,987.28.

The BSP found the sudden and sharp increase by P50 million in one day of the accrued interest receivable account of Prime Savings Bank to be highly improbable.

The BSP found the explanation of Meneses, Antonio and Guño on the sudden and sharp increase of the bank's accrued interest receivable to be false, misleading and unfounded.