Court of Appeals affirms indictment of 6 savings bank execs in P389-million DBP loan scandal

MANILA, Philippines - The Court of Appeals (CA) has upheld the criminal indictment over five years ago of six bank executives for obtaining P389.8 million in loans from the Development Bank of the Philippines (DBP) supposedly through false representations.

In a 20-page decision penned by Associate Justice Ruben Ayson, the eighth division of the appellate court upheld the resolution issued by former justice secretary Raul Gonzalez in January 2005 indicting Rodolfo Buenaventura, Librada Dio, Nilda Fajardo, Lelaine Fernandez, Benjamin Cruz and lawyer Ligaya Cruz, all officers of Hermosa Savings and Loans Bank Inc. (HSLBI), for 40 counts of estafa in connection with the 40 loans they secured from the DBP on various occasions from 1994 to 2000.

The CA junked the petition for review of the bank officials seeking to nullify the DOJ resolution that found probable cause to prosecute them in court.

The CA said it found the findings of the investigating state prosecutors “were based on the evidence presented by both parties and were arrived at after a thorough review thereof. This is pursuant to their power to direct and control criminal prosecutions and to conduct preliminary investigations.”

The appellate court ruled that contrary to the allegation of the petitioners, there was no grave abuse of discretion on the part of the former justice secretary in issuing the assailed resolution.

The fact that several resolutions of the DOJ were subjected to several motions or reconsideration by the petitioners, the CA said it believes that the case “went through thorough review to determine which case or cases are to be filed in court.”

Associate Justices Amelita Tolentino and Normandie Pizarro concurred with the ruling.

Court records show that HSLBI availed itself of 40 loans from the DBP from Feb. 2, 1994 to Nov. 29, 2000, which reached an aggregate amount of P389,809,867.

On March 31, 2001, a regular examination of HSLBI’s loan portfolio was conducted by the Department of Thrift Bank and Non-Bank Financial Institutions of the Bangko Sentral ng Pilipinas (BSP) and discovered suspicious tampering and alterations on the various loan documents submitted by the bank.

The DBP conducted its own investigation to validate and verify the findings of the BSP department and found that 40 of the 50 credit accounts were attended by fraudulent acts.

This prompted the DBP to file a criminal complaint before the DOJ against the HSLBI officers for estafa.