CA affirms 6-mo suspension of 3 SSS officials

The Court of Appeals has affirmed the six-month suspension imposed by the Office of the Ombudsman on three officials of the Social Security System (SSS) for their involvement in the purchase of the shares of stock of the Philippine Commercial International Bank, Inc. (PCI Bank) at an overprice of P1.16 billion.

In a 20-page decision penned by Associate Justice Arcangelita Romilla-Lontok, the appellate court’s Thirteenth Division affirmed the six-month suspension of SSS senior vice president for investment Edgar Solilapsi and management committee members Horacio Templo and Lilia Marquez. The court, however, dismissed the petition filed by other officers and members of the SSS led by Marissu Bugante which seeks the removal from the service of respondents Amador Monteiro, senior vice president for legal collection; Solilapsi, and executive management committee members Templo, Carlos Arellano; Leopoldo Veroy; Marquez, Rafael Estrada, Miguel Varela, Marianita Mendoza, Juan Tan, Cecilio Seno, Bienvenido Laguesma and Aurora Arnaez.

The Office of the Ombudsman in a decision issued on June 25, 2002, initially held that Arellano, Templo, Solilapsi and Marquez were guilty of grave misconduct while Estrada, Varela, Mendoza, Tan, Seno, Laguesma and Arnaez were found guilty of conduct prejudicial to the best interest of the service.

The Office of the Ombudsman then ordered the dismissal from the service with forfeiture of retirement benefits of Arellano, Templo, Solilapsi and Marquez.

The Ombudsman also imposed a six-month suspension without pay on Tan and Mendoza while Estrada, Varela, Seno, Laguesma and Arnaez were ordered to pay a fine equivalent to six months of their per diem per meeting. It meanwhile absolved Veroy and Monteiro of any culpability in connection with the purchase of PCIB shares.

On the recommendation of its Administrative and Adjudication Bureau, the Office of the Ombudsman on June 25, 2002 issued a memorandum lowering the penalty imposed on Templo, Solilapsi and Marquez from dismissal to just six-month suspension as they were only found guilty of conduct prejudicial to the best interest of the service.

The Ombudsman also dismissed the administrative charges against the other respondents due to the absence of clear evidence of negligence on their part in the purchase of the PCIB shares. In addition, the Ombudsman also dismissed the criminal charges filed against the respondents, saying the complainants failed to establish that the accused have a personal or material interest in the investment.

In their appeal, Bugante’s group argued that the Ombudsman erred in ruling that the money paid by SSS for the PCI Bank shares was not an overprice but a premium. Bugante’s group stressed that the payment of premium using government money is not allowed under the law.

Bugante’s group also stressed that the Ombudsman had failed to consider the damage suffered by the government due to the anomalous transaction consisting of P1.16 billion overprice, P1.92 billion opportunity loss, and P4.5 billion loss in value as of August 20, 2001 of the PCI Bank shares purchased by SSS at P7.5 billion.

The respondents, according to the petitioners, should also be held responsible for grave misconduct and meted the penalty of dismissal instead of dismissal.

In junking the appeal, the CA noted that no injury was sustained by the SSS as it remains to be the owner of the shares and that the said shares can be sold by SSS for a price even higher that its acquisition.

“The transaction was within the powers of SSS to enter into, procedures for approval having been strictly followed. Due diligence was exerted before SSS proceeded with the transaction. It did not violate the provisions of the Anti-Graft and Corrupt Practices Act. The transaction was not grossly and manifestly disadvantageous to SSS. It was the product of a valid business judgment in the absence of a court order nullifying it. It was within the powers and functions of SSS. If there was a taint of illegality the BSP (Bangko Sentral ng Pilipinas) would have not given its approval to the transaction,” the CA said.

The CA further noted that the acquisition of the questioned shares were done in accordance with the SSS Law and Investment Guidelines and the transaction was entered into after a careful evaluation of the officials involved.

The appellate court also agreed with the position of the respondents that they cannot be charged with graft for acquiring shares at a premium as it is a standard practice to pay a premium in the acquisition of shares in block.

“The circumstances attendant to the transaction cannot be characterized to have been done with undue haste. Respondents’ recommendations were duly approved by the Social Security Commission,” the CA said.