New DOJ case filed vs Espiritu, others

Former Finance Secretary Edgardo Espiritu remains in hot water even after his celebrated testimony at the impeachment trial of former President Joseph Estrada. Espiritu and several of his associates have been dragged in another case involving the failed investment firm Westmont Investment Corp. or Wincorp.

Halbert Uy, a client of United Overseas Bank and one of about 2,200 investors trying to recover their placements totalling P7 billion in Wincorp, has filed an estafa case at the Department of Justice against Espiritu, his son John Anthony, Luis Juan Virata and 14 other officials of Wincorp, UOB and affiliates Hottick Holdings Corp. and Powermerge Corp.

In his complaint, Uy said the younger Espiritu, who was then chairman of Wincorp until its collapse early last year, funneled their placements to loans to companies owned by the Espiritus and their business allies, most of whom are also Wincorp stockholders.

He claimed that the company channeled his P29-million investment to partly finance a P1.36-billion loan Wincorp gave to Hottick in 1997.

Uy said when Hottick failed to pay the loan, the newly-formed Powermerge assumed the rights of Hottick "without the corresponding obligation to pay for the outstanding obligation of Hottick."

Both Hottick and Powermerge are controlled by Virata, a close Espiritu associate.

Wincorp even increased to P2.5 billion its loan to Powermerge despite the borrower’s failure to meet the loan requirements, Uy said.

Hence, he charged that the firms acted in conspiracy with one another when they "sytematically and deliberately released or made non-viable the security for their obligation."

He said this act made the Wincorp officials renege on their promise to ensure investors that the money they had entrusted will "be lent to credit-worthy borrowers and with the expectation that the money will be returned at the stipulated dates."

In 1996, Uy said he bought about P29 million worth of commercial papers of Wincorp through UOB on the assurance that such placements, regardless of the payment or non-payment of the third party borrower, will be returned to the depositor upon maturity, and that the transactions were sanctioned and supported by UOB.