DOF files graft charges vs 4 former LWUA officials

MANILA, Philippines - Four more government officials have been charged by the Department of Finance (DOF) for their alleged involvement in the acquisition of an ailing bank using the funds of state-owned Local Water Utilities Administration (LWUA).

In a 36-page complaint filed before the Department of Justice on Friday, the finance department charged Eduardo Bangayan, Aurelio Puentevella, Enrique Senen Montilla III (former LWUA trustees) and Wilfredo Feleo (former LWUA acting administrator for finance) for violating the Anti-Graft and Corrupt Practices Act and the country’s banking regulations.

In its complaint, the DOF said the LWUA officials did not seek the required approval of the Monetary Board before they passed and approved the acquisition of Express Savings Bank, Inc. in Cabuyao, Laguna in 2008.

LWUA, the state-owned regulatory agency for local water districts, approved the acquisition of Express Savings, an ailing bank, to develop this into a wholly owned subsidiary of the agency.

However, the finance department said that any sale or transfer of shares that will result in ownership of more than 20 percent of the voting stock of a bank needs prior approval of the Monetary Board, the policy-making body of the Bangko Sentral ng Pilipinas (BSP).

“We just garnered the pieces of evidence against these people so the case against them was just filed now,” Finance Secretary Cesar Purisima said.

DOF’s complaint said the respondents are public officers who acted in the discharge of their official functions.

“The act was done through manifest partiality, evident bad faith, or gross inexcusable negligence,” the complaint said.

Last April, the finance department filed a complaint against LWUA chairman Prospero Pichay Jr. and trustees Renato Velasco, Susana Vargas, Bonifacio Maria Peña and Daniel Landingin for irregularly purchasing a total of 445,337 shares of stock of the bank or 60 percent of the bank’s total shares for P80 million.

Aside from this, LWUA spent another P400 million to infuse fresh capital in the bank, and deposited another P300 million as savings deposits in 2009.

Acting on the complaint, the Office of the Ombudsman dismissed Pichay from service while Malacañang also ordered a 90-day preventive suspension against Velasco, Vargas and Peña.

The bank, originally owned by the Gatchalian group suffered losses of up to P27.87 million from 2005 to 2009, according to the finance department, citing data from the Securities and Exchange Commission.

Purisima said the filing of the case against LWUA officials should serve as a warning against corrupt government officials, particularly those in the government-owned and controlled corporations (GOCCs).

“Let this serve as a warning to other GOCC officials that the government is serious on eradicating corruption in the bureaucracy and is looking at every agency in its run against offenders,” he said.