Business leader warns vs effects of coco ruling

Industrialist Raul Concepcion warned yesterday that the Sandiganbayan’s July 11 decision on the coconut levy funds "will have far reaching effects" on the business sector.

"The ruling could impact not only on United Coconut Planters Bank (UCPB) and San Miguel Corp. (SMC) but also on other companies whose ownership were questioned in the past," he said.

Concepcion made the remark after the Sandiganbayan ruled last Friday that the UCPB shares under the name of businessman Eduardo Cojuangco Jr. are truly and beneficially owned by the government.

Concepcion said a mishandling of the UCPB and coconut levy case "could send the wrong signals to local and foreign investors, forcing them to hold investments until after the May 2004 elections."

"These recent disturbing developments (are) not what we need right now. What is urgent is the need to be one and pull together," he said.

"The possibility of (the issue) stunting the modest gains we have made in moral and economic improvements should be a concern for all of us," Concepcion added.

At the same time, he warned that bank regulators should be also prudent in auditing the books of UCPB.

"Because of its sensitivity, those auditing the books of UCPB should do their work diligently before making public disclosures on the bank’s finances so that the reputation of reputable borrowers will not be unduly and unfairly tarnished," he said.

At least two foreign groups are supposedly conducting due diligence audits of UCPB with a view to acquiring the cash-strapped bank.

Sources in the banking industry said one foreign group had been "scoping" UCPB as early as two months ago and conducted a due diligence audit.

The source said the group was looking at UCPB as a bargain because its long-pending ownership issue and its poor financial condition placed its stock prices at a discount.

The bank signed with the Philippine Deposit Insurance Corp. (PDIC) a P20-billion rescue plan four days before the Sandiganbayan released its decision.

The UCPB has also been in separate talks with another foreign group which is supposedly "keenly interested" in the troubled bank, which had already received a P5 billion cash infusion from the PDIC in May. — With Mayen Jaymalin