MANILA, Philippines - Former trade minister Roberto Ongpin has challenged the Development Bank of the Philippines (DBP) to substantiate its claims that the bank’s previous board granted him a P660-million behest loan.
“Because it is obvious that DBP’s lawyers are masters of prevarication and obfuscation and in order to settle this matter once and for all, I challenge DBP’s lawyers to forthwith sit down with my lawyers and produce actual documents,” Ongpin said.
“They should produce documents with regard to the internal audit findings, the show cause letters and the BSP letter. On our side, my lawyers will produce documents regarding the value of my collateral and the net worth of (Deltaventure Resources Inc.) as of 2008 and 2009 based on BIR submissions. Only in this way can it be settled who is telling the truth and who is telling lies,” he said.
He stressed that the loans extended to him were aboveboard and that his companies complied with all the requirements.
DBP, represented by legal counsel Dada Ongkiko Acorda of the Ongkiko, Manhit, Custodio and Acorda Law Office, claimed that the facility extended to Ongpin resulted in “lost opportunity trading gains” for the state-owned bank, amounting to some P412 million.
Acorda also alleged that the loan was under-collateralized at 1.25:1 ratio, lower than the 2:1 ratio mandated by the Central Bank.
Acorda questioned how Ongpin’s DVRI, with a paid-up capital of only P625,000 and reported losses of P98 million, was able to “obtain gargantuan loans from DBP in the amount of P150 million and P510 million with extraordinary speed.”
But Ongpin said DVRI’s net worth was already more than P1 billion when it obtained the loans from DBP.
He said the reported losses of the company in 2008 were actually unrealized losses and attributable to the fact that DVRI is a holding company with a significant stake in marketable securities.
“Everybody knows that there was a stock market crash in 2008. Thus all holding companies (including DVRI) had to record the losses accordingly. But what is more important is that by 2009, when the stock market rebounded, DVRI was able to regain what it lost in 2008,” Ongpin said.
He added that he has filings with the BIR to prove his point.
Ongpin’s group reportedly used the loan to purchase 50 million shares held by DBP in Philex for P12.75 per share. He eventually sold the shares to Manuel Pangilinan of the Metro Pacific Investments Corp., the Philippine flagship of Hong Kong-based conglomerate First Pacific Co. Ltd., for P21 per share, gaining P9.25 each share.
Ongpin, however, denied allegations he and then DBP president Reynaldo David conspired to deprive the bank of opportunity trading gains on the sale of Philex shares.
“As to the price of Philex shares going to P21 per share after only a few weeks, I have already said that to expect Mr. David or myself (or anyone for that matter) to be able to foretell future stock prices is the height of naivete. If I had that ability (and now that Philex prices have reached almost P28 per share), I certainly would not have agreed to sell to First Pacific at P21 per share,” he said.
Ongpin said the DBP management could only be using him to divert attention from the bank’s embarrassing performance.
“If, as they say, the present DBP management is true to their oath as public officers and only has the best interest of the institution they serve in mind, then they should start looking at how to run the bank properly and effectively. As things stand, reports have indicated that the financial performance of the bank is dismal (certainly paling in comparison to the previous management),” he said.