PDIC can run after erring officials of closed banks

MANILA, Philippines - The government can run after erring bank officials who may have contributed to the closure of a bank, the Philippine Deposit Insurance Corp. (PDIC) said.

 â€œThe PDIC is authorized to conduct investigations and file necessary cases against erring bank officials and unscrupulous individuals,” the agency said in a statement last Friday.

Under Republic Act 3591, the PDIC was designated as the official receiver of failing banks shut down by the Bangko Sentral ng Pilipinas (BSP). As receiver, it has the responsibility to determine if a bank could be rehabilitated or should be liquidated.

But PDIC said it does not stop there, as it also has the responsibility to ensure that payments made to bank clients are of legal basis.

It cited the need to “protect” the Deposit Insurance Fund, the PDIC’s funding source used to pay liabilities to depositors and creditors of shuttered banks.

The PDIC charter mandates the agency to “strengthen mandatory deposit insurance coverage system to generate, preserve and maintain confidence in the stability of the banking system as well as protect it from illegal schemes and machinations.”

In relation to this, the PDIC said it sued Hans Paulo Bulos, former president of First Country Rural Bank Inc. which was padlocked by the BSP in 2010. The case was filed before the Department of Justice last May 9.

According to the statement, Bulos violated the PDIC charter when he used funds in the bank’s deposit accounts to pay loans with an aggregate value of P10 million “without consent” from the depositors.

“Investigation further showed that Hans Paulo Bulos likewise instructed the non-recording of said transactions in the books of First Country Bank,” it pointed out.

This was the second case filed by the PDIC against bank officers in a week. Last May 10, the agency said it also sued six former officers of the Export and Industry Bank led by its previous chairman, Jaime Gonzales.

The respondents were charged with violations of the General Banking Law of 2000 when they ordered the payment of $4.8 million in “success fee” for a service that was not actually rendered.

It added that the bulk of the amount of $3 million was paid to AO Capital Partners Ltd., where Gonzales also served as chairman.

Other respondents were Juan Victor Tanjuatco and Nilo Pacheco Jr., presidents; Teresita de Ocampo, vice-president and chief financial officer; Alex Luis Pesigan, senior vice-president; and Adeline Grimares, first vice-president.

Exportbank was closed down April last year after it failed to service depositor claims. The PDIC said it would begin the bank’s liquidation this month.