PDIC files chargesvs top BF officials

MANILA, Philippines - The Philippine Deposit Insurance Corp. (PDIC) is filing charges against officials of the shuttered Banco Filipino Savings and Mortgage Bank for unsafe and unsound banking practices.

Charged criminally before the Department of Justice (DOJ) for violating the PDIC charter for conducting business were members of the Board of Diretors and Executive Committee of Banco Filipino.

The bank was ordered closed March 17 of last year.

Charged were Banco Filipino chairman and president Teodoro Arcenas Jr., vice chairman Albert Aguirre, and executive vice president Maxy Abad, executive vice president Catherine Aguirre-Hernandez,

Also charged were board directors Delfin Dimagiba, Ramon Montano, Orlando Samson, and Francisco Rivera.

“PDIC continues with its pursuit to bring to justice perpetrators of unsafe and unsound banking schemes,” the state-run deposit insurer said in a statement.

The agency asked the Justice Department to conduct a preliminary investigation against the respondents paving the way for the filing of criminal charges for conducting business in an unsafe and unsound manner.

PDIC alleged in its complaint that the respondents unduly favored 11 related entities when they approved loans aggregating P3.08 billion in violation of the General Banking Law and the bank’s policy manual, and despite adverse findings by bank personnel evaluating the loan applications.

“This resulted in loss or damage to Banco Filipino. They are related entities because the respondents are also directors or officers of the borrowing companies or the companies that allowed their properties to be used as collaterals for the loans,” PDIC stated in the complaint.

Furthermore, the complaint stated that the respondents willfully failed to collect P2.99 billion of these loans although they have been past due for periods ranging from four to seven years.

The complaint alleged that the respondents did not exert any effort to collect the loans even as Banco Filipino was already suffering from huge operational losses.

   PDIC pointed out that Banco Filipino spent P515.5 million in legal fees between 2008 and 2011 but not a single centavo was collected from the past due loans of the 11 Related Entities.

   The government-owned agency also explained that Banco Filipino advanced a total of P37.556 million as real estate taxes for the collaterals of these loans.

   Weeks after its closure, the Bangko Sentral ng Pilipinas (BSP) filed criminal charges against directors and officers of Banco Filipino also with the DOJ for falsification, grant of illegal loans, and major violations of banking laws, rules and regulations.

   The BSP said the officers repeatedly violated several laws including willful refusal to stop the conduct of unsafe, hazardous and unsound banking practices; falsification and issuance of false statements to hide the true financial condition of the bank; willful refusal to file audited financial statements; and willful refusal to report DOSRI (directors, officers, stockholders and other related interest) loans.

   They were also charged with 26 counts of willful refusal to comply with numerous banking laws and BSP directives, including the appointment of two independent directors as well as the holding of regular monthly meetings of its Board of Directors.