BSP urged to mediate in UOBP dispute

Filipino investors of the United Overseas Bank of the Philippines (UOBP) appealed yesterday to the monetary authorities to exercise their "power of persuasion and regulation" to bring to an end the "intracorporate dispute" rocking the Singaporean-controlled bank.

Lawyer Avelino Sebastian, a board member of UOBP representing Tony Tan Caktiong of the Jollibee food chain, said the sooner the word war pitting the Filipino investors against the Singaporean majority shareholders is stopped, the better for both parties and the bank.

"The Bangko Sentral ng Pipinas (BSP) or the Monetary Board (MB) cannot be fence-sitters here because the survival of UOBP is a paramount concern, not only for the investors and the depositors but also for the government," Sebastian stressed.

He pointed out that an early solution to the conflict is unlikely because of an impasse on the issue pertaining a P1.4-billion transfer agreement.

Sebastian also asserted that the BSP or the MB are duty-bound to intervene in the UOBP mess if only to protect the government’s "substantial exposure" in the bank, made through the Philippine Deposit Insurance Corp., which was a major part of a state-assisted rehabilitation plan for the ailing company.

"There are a number of compelling reasons for BSP Governor Rafael Buenaventura to intervene and broker an immediate and lasting solution to the dispute between the Filipino and Singaporean investors which will have an adverse impact to the bank," Sebastian said.

He added that a settlement is very unlikely if the opposing camps were left to iron out their differences by themselves.

He also recalled that the conflict erupted after the MB disallowed a write off of P1.4 billion worth of uncollected loans as payment to the Espiritu group of investors who were the original owners of Westmont Bank, the progenitor of UOBP.

Because of the reversal of the write off plan, the Espiritu group was left holding the proverbial empty bag after yielding their 28 percent shares that enabled the Singaporeans to take control of 60 percent of UOBP.

For their part, the Singaporeans alleged that the local investors failed to deliver the P1.6 billion fresh capital for the bank.

"The accusation is completely baseless and misleading because the Singaporeans deliberately suppressed the key elements of the transaction that will exculpate the Filipino group," Sebastian said.

Claiming the Espiritus were never paid for their shareholdings, Sebastian said the Singaporeans wanted to acquire a bank for a song.

Buenaventura on Friday hinted that the warring camps should forge a ceasefire and settle things out by themselves outside of the BSP.

"They have to solve their differences because eventually, they will suffer and even the bank will suffer," the government told reporters.

Resisting a move by the Singaporeans to elevate their dispute to the Australian Commercial Dispute Center (ACDC) based in Sydney, the Filipino investors were able to secure a court injunction enjoining all parties involved from pursuing the ACDC proceedings.