‘PCGG mismanaged UCPB’

The lawyer of presidential aspirant and business tycoon Eduardo Cojuangco Jr. accused the Presidential Commission on Good Government (PCGG) yesterday of mismanaging the United Coconut Planters Bank (UCPB), which is reportedly seeking another P20 billion in financial aid.

"Why does UCPB need another P20 billion to ensure its survival? We are fighting about nothing. We’re litigating something that is not there anymore," Estelito Mendoza told justices of the Sandiganbayan’s first division in a hearing.

Mendoza pointed out that while the court initially ruled the funds are government-owned, it would still be useless if the farmers wait for nothing.

"If UCPB collapses, these shares will be worth nothing and that is imputable to the mismanagement of PCGG. All of these could be entirely meaningless if the assets are worthless," he added.

Mendoza filed the other day a motion asking the Sandiganbayan to order the PCGG to submit a report on the UCPB’s financial condition and to explain why it needs P20 billion in financial aid and possibly another P20 billion from the Philippine Deposit Insurance Corp. (PDIC).

Financial assistance given by the PDIC to banks, Mendoza argued, are usually funds borrowed from the Bangko Sentral ng Pilipinas (BSP). "In other words, it’s still government money. The UCPB shares of stock are no longer worth anything," he explained.

Mendoza lamented the fact that UCPB, once ranked as the No. 1 local commercial and universal bank in terms of capital, slid to No. 11 in 2000 or 15 years after management by PCGG-appointed and designated directors.

Cojuangco, now chairman of food and beverage giant San Miguel Corp., himself disclosed that UCPB has "deteriorated" since 1986 when the PCGG seized 95 percent of the bank’s outstanding capital stock. All members of the UCPB board have been PCGG nominees since then.

Mendoza emphasized that the principal purpose of PCGG’s power of sequestration is to preserve sequestered assets.

Assistant Solicitor General Amparo Tan, who represented PCGG, told Justices Teresita Leonardo de Castro, Francisco Villaruz and Diosdado Peralta that an "audit" of the bank’s status "will be out soon."

However, she said, PCGG has "misgivings" on disclosing information to Cojuangco because of the court’s ruling that the UCPB shares in question are owned by the government.

"The right to information (on bank’s status) flows from the ownership issue and the court had ruled that the UCPB shares belong to the government. Therefore, he is not entitled to it," he explained.

Marlou Urbano, counsel for the Philippine Coconut Producers Federation (Cocofed), told the court they would be "joining" Mendoza in his motion to compel PCGG to make an accounting because coconut farmers have the right to know UCPB’s real status.

"The assets should be preserved. Being the registered owners and stockholders (of UCPB), they have the right to know. They have the perfect right to know the real financial condition of the bank," he said.

The Sandiganbayan declared last July 11 that the funds used by Cojuangco in acquiring UCPB were sourced from the levies religiously paid for by coconut farmers, and were thus owned by the government from the very beginning.

The ruling held that Cojuangco’s 95,304 UCPB shares, which form part of the 72.2 percent UCPB stake that was paid for by the Philippine Coconut Authority (PCA) through the coconut levy funds in 1975, were "conclusively owned by the Republic of the Philippines."

Mendoza argued, however, that Cojuangco has never staked any claim on the entire 72.2 percent of capital stock which belongs to the coconut farmers. Rather, he is trying to defend his ownership of 7.2 percent which was given to him as commission by way of an agreement with PCA, the administrator of the controversial coco levy funds.

Nevertheless, Mendoza said that although these shares had been deemed as the government’s, "it (UCPB’s financial report) would still be important to the government itself."

"The decision is not yet final. It goes through a process. I’m not giving up hope because even the SC reconsiders its decisions," he said, citing previous instances when the high tribunal changed its ruling on appeal.