The criminal charges were filed with the Ombudsman by eight SSS officials identified with the camp of former chairman Vitaliano Nañagas who was ousted after employees objected to reforms he wanted to implement in the state-run pension fund.
Aside from Arellano, the executives charged were executive vice president and chief actuarian Horacio Templo, retired executive vice president Leopoldo Veroy, senior vice president for investments Edgar Solilapsi, senior vice president for legal and collection Amador Monteiro and loans department chief Lilia Marquez.
Aside from Laguesma, the eight members of the Social Security Commission who approved the deal were Commissioners Rafael Estrada, Miguel Varela, Marianita Mendoza, Juan Tan, Cecilio Seno, Raul Inocentes and Aurora Arnaez.
Represented by Government Corporate Counsel Amado Valdez, the complainants said the respondents caused injury to the government when they overpriced by P1.1 billion the 25,855,382 shares of common stock of PCI Bank in April 1999.
Valdez asked Ombudsman Aniano Desierto to suspend the 12 incumbent officials to prevent them from tampering records and harassing witnesses.
Administrative charges were also filed for alleged grave misconduct and conduct grossly prejudicial to the interest of the service.
"By buying at P290 per share, the SSS bought subject shares of PCI at an overprice of P45 per share compared to its market price at the time of purchase at P245 per share," a portion of the nine-page complaint read.
"This translates to a total of P1.1 billion for the shares. This overprice represents the damage the SSS suffered from this transaction," the complainants alleged as they disclosed that the contract with PCI had the blessing of the eight SSS commissioners.
The shares was split into three shares at P96 per share but is now valued at P36 per share.
The criminal and administrative suits are believed only the first salvo of further charges against SSS officials who were allegedly involved in "behest investments" during the Estrada administration.
The charged executives are also allegedly behind the disruptive SSS employee walkout in late July that was meant to remove Nañagas who was poised to file corruption charges against the executives.
Another case is expected to be filed against the SSS executives for the huge loss the pension find absorbed when it invested members’ contributions in gaming and leisure firm Belle Corp.
Arellano has admitted the investments were made on orders of then President Joseph Estrada, who has also been charged before the Ombudsman for the anomaly.
The anomalous investments were supposedly identified in an audit report that was sent to Malacañang and forwarded to the Presidential Commission Against Corruption (PCAC), when Nañagas was ousted early this month.