PDIC settles P11-billion claims of Legacy Banks depositors

MANILA, Philippines - The Philippine Deposit Insurance Corp. (PDIC) has paid P11 billion to depositors of the 12 closed banks collectively known as the Legacy Banks, its top official yesterday said.

The P11 billion in settled claims represents 77.6 percent of the total claims of P14.2 billion, according to PDIC data. On the other hand, PDIC also denied claims amounting to P788 million or 5.5 percent of the total amount as these were found to be for non-existent accounts.

In a press briefing yesterday, PDIC president Jose Nograles said that the claims that had not been paid were from depositors who have yet to submit sufficient documents. Others have been put on hold pending investigation or settlement of legal issues.

Nograles said the P11 billion worth of claims have been settled after a PDIC team and private auditors combed through roughly 2,000 boxes of bank records in disarray and painstakingly pieced together available documents to ensure that only valid claims are paid.

The Legacy Banks, owned by businessman Celso delos Angeles, were closed almost simultaneously and placed under PDIC receivership in December 2008. The said banks and other affiliated companies belonging to the Legacy Group were subject of a Congressional inquiry in 2009 due to indications of widespread fraud.

PDIC tapped the help of forensic experts from Punongbayan and Araullo, an affiliate of international audit firm Grant Thornton in its investigation of the Legacy banks.

The auditors concluded that in general, funds did flow into the banks as deposits.

Based on the findings of the forensic experts, PDIC said that athough some fraudulent and suspicious transactions were uncovered, a large portion of accounts were found to be valid.

The findings of Punongbayan and Araullo together with results of PDIC investigations led to the filing of 26 cases against Legacy banks owners and officers amounting to P8.4 billion.