Securities and Exchange Commission chief's fate hangs

The fate of embattled Securities and Exchange Commission chair Fe Barin and other SEC officials will be known when President Arroyo returns on Saturday from the US, Malacañang said yesterday.

Press Secretary Cerge Remonde said Mrs. Arroyo is “very concerned” about the plight of thousands affected by the collapse of some pre-need firms, including Legacy Consolidated Plans Inc. owned by Sto. Domingo, Albay Mayor Celso de los Angeles. Mrs. Arroyo is expected to return to Manila on Feb. 7 after attending the National Prayer Breakfast in Washington.

Remonde’s pronouncement came in the wake of senators’ calls for Mrs. Arroyo to fire negligent SEC officials for failing to protect plan holders from anomalous practices of pre-need companies.

“Let’s not preempt the President’s actions,” Remonde said when asked if the Chief Executive would heed the calls from the Senate for heads to roll in the SEC.

“The President will personally look into the matter when she comes back,” he said.

He said Mrs. Arroyo will review the findings of the ongoing congressional investigations and see what actions can be taken by the executive branch.

“The President will do everything she can to help the plan holders,” he said.

In the meantime, he said an assistance desk has been set up at the SEC to help distressed plan holders.

Nograles investments no more

Speaker Prospero Nograles may have to say goodbye to the P10 million that De los Angeles claims he owes the House leader.

Romeo Mendoza Jr., general counsel of the Philippine Deposit Insurance Corp. (PDIC), said depositors of Legacy’s 12 closed rural banks are each entitled only to a maximum of P250,000 even if they have bigger deposits.

“That’s the maximum amount covered by the deposit insurance law,” he told The STAR yesterday.

“I’m talking to you in general terms. I cannot talk about specific accounts,” he said.

But he wouldn’t confirm if the Speaker is indeed a depositor of any of De los Angeles’ banks, saying the Bank Secrecy Law prohibits him from divulging such information.

“The law now covers us because we have taken over the closed Legacy banks. We have assumed the role of banker,” he added.

Responding to questions, Mendoza said clients with deposits larger than P250,000 can run after De los Angeles and his banks for the balance of their deposits.

“We in PDIC will also go after his assets for the amount covered by the insurance law,” he said.

PDIC president Jose Nograles, a brother of the Speaker, has estimated that total claims by about 130,000 depositors of Legacy’s 12 rural banks will amount to P14.4 billion.

The PDIC has applied for a P14-billion loan from the Bangko Sentral ng Pilipinas to pay off Legacy depositors.

Last week, without mentioning any amount, Speaker Nograles admitted that he had “placements” in the Legacy group of companies, presumably in its banks and not in the pre-need companies, which were not authorized to take deposits or engage in lending.

He said he was attracted by the group’s offer of doubling deposits in three to five years.

He said he made his placements in 2004, and that he could have already recovered his capital in 2006 or 2008.

Last Monday, in his Senate testimony, De los Angeles revealed that the Speaker had up to P20 million in investments in Legacy.

“I still owe him P10 million,” he said. He did not say if this was part of capital or if it represents interest.

Former PDIC president Ricardo Tan earlier claimed that Nograles, as House majority leader in 2005, had asked him to go slow on De los Angeles and his rural banks.

The Speaker has since denied Tan’s claim, although he admitted meeting with Tan concerning a closed Davao City bank from which he said his constituents were trying to recover their deposits.

Last Tuesday, during a hearing of the House committee on banks on the failure of Legacy, another Davao City congressman, Isidro Ungab, asked De los Angeles why his people solicited deposits from his and Nograles’ constituents and from other people in the Davao provinces.

“You have no bank in Davao City. My constituents do not know now where to collect their money, if they can collect it,” he told him.

De los Angeles answered that he has a bank in General Santos City.

“But that is far from Davao City,” Ungab shot back. The two cities are separated by a three-hour land trip.

Members of the committee on banks chaired by Manila Rep. Jaime Lopez – except for Ungab and Representatives Edcel Lagman of Albay and Teodoro Locsin Jr. of Makati City – did not question De los Angeles about the failure of his banks and pre-need companies.

‘Sue Legacy head now!’

Senate President Juan Ponce Enrile and Sen. Manuel Roxas II asked the SEC to immediately file a case against De los Angeles to prevent him from leaving the country and to allow authorities to freeze his assets.

“The SEC should act now. They should now go to court and ask for an attachment order against De los Angeles’ assets,” Roxas said.

“They are really very slow to act. Do we always have to tell them what to do?” he added.

“It is important that the depositors and plan holders recover their hard-earned money, and the government’s job is to ensure they get paid,” Roxas said.

“I am certain that De los Angeles has other properties which he can sell to pay his plan holders and depositors. The government cannot pay for his financial obligations,” he added. Paolo Romero, Jess Diaz and Aurea Calica