Solon seeks cancellation of United Overseas Bank license

Isabela Rep. Rodolfo Albano called yesterday for the cancellation of the license of United Overseas Bank of the Philippines (UOBP) by the Monetary Board for gross violation of the Constitution as well as anti-dummy and banking laws during the 1999 leveraged buyout of the former Westmont Bank by the Singapore-based UOB Limited.

"If I have to file the case myself against UOBP before the Monetary Board then I would do it," Albano, author of House Resolution 277 seeking an inquiry into the unlawful acts committed by UOBP and the UOBL inimical to the banking industry and the economy.

Albano said foregoing facts on UOBL, its dummy corporations and UOBL nominated director in the board of UOBP are in violation of the Constitution, the General Banking Law of 2002 and the Generally Accepted Accounting Principles (GAAP), and have rendered the latter susceptible to penalties under the Anti-Dummy Law and the Corporation Code for said penalties.

"These penalties include suspension or revocation of its primary commercial banking license and suspension or revocation of its primary franchise issued by the Securities and Exchange Commission. Its continued operations erodes the general public’s confidence in the Philippine banking system," Albano said.

Albano said SEC documents reveal that UOBL has violated Section 2 (1) of Republic Act 7221 by using a corporation, Manta Ray Holdings, Inc., and its principal stockholders Ernest Tanchi, Jr. as a dummy for the purpose of holding an additional seven percent of the voting stock of UOBP, to gain control over the bank. He said this was in violation of RA 7221 which allows foreign banks to own up to 60 percent only of the voting stock of an existing bank.

Albano added UOBP extended substantial loans principally owned by Tanchi-Harbor Holdings, Inc. and Lion City Landholdings, Inc. which are both thinly-capitalized and lack of required assets or credit standing for purposes of obtaining said loans from other banking or financial institutions at arms length transactions.