Danding lawyer raises doubts on UCPB finances

The lawyer of business tycoon Eduardo "Danding" Cojuangco raised doubts yesterday about the true financial condition of the sequestered United Coconut Planters Bank following reports that the P20-billion bail out package from the Philippine Deposit Insurance (Corp.) is not enough and that another P20 billion is needed to ensure the bank’s viability.

Should we be not agitated by this report (that UCPB needs P40 billion)?" asked former Solicitor General Estelito Mendoza, who said he himself was privy to the rehabilitation of Philippine National Bank, which is obviously a "bigger bank than UCPB."

"Why does the UCPB need P40 billion more? I know that, I have been part of PNB’s rehabilitation," he noted, implying that what appeared in newspapers as the UCPB’s financial condition could not have been its true state because it needs more money to keep the bank afloat.

Mendoza expressed fears this situation might affect not only the other banks but the entire industry as well. "It’s very bad because there might be a bank run, and this will not be good for the whole banking industry," he said, adding they have to know the "value of assets of UCPB."

He has accused the Presidential Commission on Good Government, being the custodian of UCPB for the last 17 years, of mismanaging the bank, which was the leading bank before the late President Marcos was ousted in February 1986 but which has now been left behind by competitors.

"If UCPB collapses, these shares will be worth nothing and that is imputable to the mismanagement of PCGG. All of these could be entirely meaningless if the assets are worthless," Mendoza told the justices of the Sandiganbayan’s first division.

"Why does UCPB need another P20 billion to ensure its survival? We are fighting about nothing. We’re litigating something that is not there anymore," he said.

Reacting to this, Assistant Solicitor General Amparo Cabotaje-Tang and Assistant Solicitor Derek Anthony Lim said the president of San Miguel Corp. can get a copy of the bank’s financial report from the Bangko Sentral ng Pilipinas.

"Cojuangco could look into them as he pleases," they suggested in their seven-page opposition, adding these bank documents "are matter of public record and which carry the presumption of truth." Banks, according to them, should be "protected" from unnecessary scrutiny, from which "undue publicity" may arise.

For the head of the blue chip firm to "demand a deeper probe" and an audit, using the anti-graft court to compel the UCPB – which is under control of the Presidential Commission on Good Government – "would be to engage in a fishing expedition," they noted.