Supreme Court upholds graft raps vs Imelda brothers, others over behest loans

MANILA, Philippines - The Supreme Court (SC) revived the case against two brothers and a sister-in-law of former First Lady Imelda Marcos and five former officials in connection with the multi-million behest loans of their company, Golden Country Farms, Inc. (GCFI).

The SC has ordered the Ombudsman to file graft charges against Armando Romualdez, his wife Vilma Romualdez, Alfredo Romualdez and Juan Syquian, stockholders and officers of GCFI; and Panfilo Domingo, Conrado Reyes, Zosimo Malabanan, Jose Tengco, Placido Mapa and Verden Dangilan, then officers and members of the board of directors of National Investment Development Corp. and Development Bank of the Philippines.

The case was revived 11 year after the Office of the Ombudsman junked it in 1998.

In a 17-page decision penned by Associate Justice Conchita Carpio-Morales, the Second Division of the Court reversed and set aside the resolution issued on Aug. 19, 1998 by then Ombudsman Aniano Desierto dismissing the complaint for violation of Section 3 (e) and (g) of RA 3019 (Anti-Graft and Corrupt Practices Act) filed by the Presidential Ad Hoc Fact-Finding Committee on Behest Loans against the relatives of the former first lady and several former government officials.

Desierto junked the graft charges against the respondents due to insufficiency of evidence and on the ground that the alleged offenses they committed have already prescribed, adding that the government did not suffer any damage as NIDC and DBP assumed ownership over GCFI due to its failure to pay the loans obtained in 1975 and 1976.

But the SC ruled that there is a probable cause to compel the respondents to face trial for the charges.

“The duty of the Ombudsman in the conduct of a preliminary investigation is to establish whether there exists probable cause to file an information in court against the accused. Considering the quantum of evidence needed to support a finding of probable cause, the Court holds that the Ombudsman gravely abused his discretion when he found such to be lacking here,” the Court said.

Records showed that GCFI had an outstanding balance of P211.95 million owing to NIDC as of June 30, 1986 and of P302.68 million to DBP as of Dec. 31, 1986.

The SC ruled that Desierto erred in ruling that the government did not suffer any injury with the grant of the behest loans following its takeover of GCFI.

The SC stressed the fact that the loan had remained unpaid at the time of the takeover “should have been enough basis for a finding of injury to the government.”

The SC added that the conflicting accounts on whether GCFI was undercapitalized when their loans were granted should be resolved in a full-blown trial.

Likewise, the Court said the former Ombudsman should have given weight to the finding of the committee, whose members were considered experts on behest loans.

It noted that committee was composed of representatives from the Department of Finance, the Philippine National Bank, the Asset Privatization Trust, the Philippine Export and Foreign Loan Guarantee Corp. and DBP.

On the issue of prescription, the Court explained that the offenses were only discovered in 1992 after an investigation conducted by the committee and that the complaint was filed in 1997 or five years after, which is well within the 10-year prescription period.

Records showed that GCFI applied for a credit facility of P43 million and a letter guarantee in the amount of P57 million, or a total of P100 million which were granted by NIDC and DBP in 1975 and 1976, respectively.

The committee on behest loans discovered that NIDC had a paid-up capital of only P3.5 million when the NIDC loan was approved and a paid capital of only P10 million when the DBP loan was granted. The committee added that the loans were also undercollaterized.

The respondents, in defense, insisted that GCFI had infused an additional capital of P100 million and that the charges against them have already prescribed considering that the complaint was filed only in 1997, which was more than 10 years from the approval of the loans in 1975 and 1976.