SC affirms dismissal of graft charges vs Danding

Manila, Philippines - The Supreme Court (SC) has affirmed the dismissal in 1999 of graft charges by the Ombudsman against business tycoon and presidential uncle Eduardo “Danding” Cojuangco Jr. in San Miguel Corp. (SMC) and 17 others in connection with alleged behest loans and investments made by the United Coconut Planters Bank (UCBP) in the United Coconut Oil Mills Inc. (Unicom).

In an 11-page decision promulgated last June 26, the High Court ruled that the Ombudsman was correct in dismissing the complaint for failure of the government to file it within the 10-year prescription period even after it found probable cause to indict the respondents.

The Office of the Solicitor General filed the complaint with the Presidential Commission on Good Governance for preliminary investigation on March 1, 1990 when the alleged crime was committed on Feb. 8, 1980 when Cojuangco and other executives of UCPB gave unwarranted benefits to themselves by increasing their one million shares to 100 million shares without cost to them.

The SC stressed that the respondents were charged for violation of Sec. 3 (e) of Republic Act No. 3019 (Anti-graft and Corrupt Practices Act, which has prescriptive period of 10 years.

“Prescription of actions is a valued rule in all civilized states from the beginning of organized society. It is a rule of fairness since, without it, the plaintiff can postpone the filing of his action to the point of depriving the defendant, through the passage of time, of access to defense witnesses who would have died or left to live elsewhere, or to documents that would have been discarded or could no longer be located,” stated the ruling penned by Associate Justice Roberto Abad.

“Moreover, the memories of witnesses are eroded by time. There is an absolute need in the interest of fairness to bar actions that have taken the plaintiffs too long to file in court,” it added.

With this, the court no longer saw the need to further discuss the findings of probable cause by the Ombudsman against the respondents.

Justices Mariano Del Castillo, Lucas Bersamin, Martin Villarama Jr., Jose Portugal Perez, Bienvenido Reyes concurred with the decision.

Justices Arturo Brion, Maria Lourdes Aranal Sereno and Estela Perlas-Bernabe dissented from the majority ruling. Justice Brion said that while he agreed with the majority opinion, he believes that the case against Cojuangco could still be pursued since he was out of the country from 1986 to 1991 and the prescription period should cease from running when the respondent is away.

Justices Sereno and Bernabe, on the other hand, believe that the prescription period should be counted from Feb. 28 1986 when the law creating PCGG was signed by then President Corazon Aquino.

Apart from Conjuangco, also cleared in the case are Senate President Juan Ponce Enrile, Jose Eleazar Jr., Jose Concepcion, Rolando Dela Cuesta, Emmanuel Almeda, Hermenegildo Zayco, Narciso Pineda, Inaki Mendezona, Danilo Ursua, Teodoro Regala, Victor Lazatin, Eleazar Reyes, Eduardo Escueta, Leo Palma, Douglas Lu Ym, Sigfredo Veloso, and Jaime Gandiaga.

The case started on April 25, 1977 when Regala, Lazatin Reyes, Escueta and Palma incorporated Unicom with an authorized capital stock of P100 million.

On Aug. 29, 1979, the Board of Directors of UCPB composed of Cojuangco, Enrile, the late Maria Clara Lobregat, Eleazar, Concepcion, Dela Cuesta, Almeda, Zayco, Pineda, Mendezona and Ursua approved Resolution 247-79 authorizing UCPB, the administrator of the Coconut Industry Investment Fund (CII Fund), to invest not more than P500 million from the fund in the equity of Unicom for the benefit of the coconut farmers.

On Sept. 4, 1979, Unicom increased its authorized capital stock to 10 million shares without par value to P495 million. This was approved by the new set of Unicom directors which included Cojuangco and Enrile.

Ten years after on March 1, 1990, the OSG filed a complaint for graft against the respondents before the PCGG.

The OSG alleged that UCPB’s investment in Unicom was manifestly and grossly disadvantageous to the government since Unicom had a capitalization of P5 million and it had no record of operation. The PCGG filed the case before the Office of the Ombudsman.

On March 15, 1999, the Office of the Special Prosecutor said that while “it found sufficient basis to indict respondents for violation of Section 3e of RA 3019, the action has already prescribed.” On May 14, 1999, the Office of the Ombudsman approved the recommendation.