The CA case is the last and most controversial in a long string of lawsuits filed by former officials of the defunct bank, effectively reversing an earlier ruling that suspended Buenaventura for a year and one day.
The suspension was not actually implemented pending the resolution of the BSP’s appeal but caused uncertainty among investors and was even cited as a major factor when the Philippines was dropped from the investment list of the California Public Employees Retirement System (CalPERS).
The CA ruling was seen by banking industry leaders as a sign that the BSP could be similarly punished for "performing their duties and protecting the interest of depositors."
The CA originally ordered Buenaventura’s suspension along with BSP Deputy Governor Alberto V. Reyes, head of the BSP’s Supervision and Examination Department.
In an amended decision penned by Associate Justice Lucas P. Bersamin, the 5th Division of the CA unanimously rejected the plea of former Urban Bank president Teodoro Borlongan to dismiss Buenaventura and the other officials named in the case.
The decision effectively lifted the suspension against Reyes as well as BSP managing director Dolores B. Yuvienco, director Candon B. Guerrero and former director Tomas Aure.
Buenaventura expressed relief at the resolution of the case, saying that it "should strengthen the resolve of others in government to continue to do their work with vigilance and courage, and to keep faith in the justice system."
"We always believed the court will rule in our favor," Buenaventura said. "We’re all professionals here and we stand by the integrity of our actions and intentions."
In the amended decision, the appellate court ruled that the dismissal of the administrative charges against Buenaventura et al was "final and unappealable."
The CA said it was dismissing the case because Borlongan was not in the position to challenge the BSP after Urban Bank’s majority owners opposed the lawsuit against the BSP decision to shut down the bank.
The court upheld the BSP’s decision to put Urban Bank under receivership under the BSP charter, considering that the bank’s own top management had continually provided the BSP the picture of the worsening situation of the bank in the four weeks leading to its unilateral declaration of the bank holiday on April 25, 2000.
After being closed, Urban Bank was taken over by the Philippine Deposit Insurance Corp. (PDIC) as receiver.