Lawyers spar over CJ loan

MANILA, Philippines - The defense panel in the impeachment trial of Chief Justice Renato Corona parried the prosecution’s allegation of irregularities in the chief magistrate’s securing P11 million in cash advance from a dissolved firm owned by the family of his wife.

Defense lawyer Ramon Esguerra said they have established that Corona’s wife Cristina was a recipient of a check worth P34.703 million put in trust under Basa Guidote Enterprises Inc. (BGEI), which is owned by her family.

“It would appear that in the payee, the name appearing here is Cristina Corona, Mrs. Corona, in trust for Basa Guidote, that means all the stockholders of Basa Guidote,” Esguerra said.

The money represented the payment by the City of Manila for the expropriation of a property of BGEI.

He expressed confidence that the presentation of the check would debunk prosecution’s claims that the P11-million cash advance of Corona came from unexplained sources.

Esguerra said the defense camp took advantage of the cross-examination to prove its point.

Lead defense counsel Serafin Cuevas presented the check during cross- examination on Securities and Exchange Commission executive director for Registration and Monitoring Department Benito Cataran.

“To the extent that we can elicit some admissions from the witness, why not? To the extent in the course of the examination, produce for the consideration of the Senate, sitting as an impeachment court, this document so that we will be aware, and so that we will stop speculating already as to the source of the P11 million,” Esguerra explained.

Esguerra noted that while the prosecution argued that the P11-million cash advance stated in one of Corona’s SALN was a fictitious loan, the defense promptly proved in yesterday’s hearing that BGEI continued operations even after its certificate of registration was revoked by the SEC.

Oriental Mindoro Rep. Reynaldo Umali, representing the prosecution panel, told the Senate that Cataran’s testimony was meant to show that the information contained in the SALN of Corona was inaccurate, particularly on the P11-million cash advance that he listed in his 2003 SALN as cash advance from BGEI.

In his questioning of Cataran, Umali wanted to show that BGEI was already nonexistent as a corporation when it issued the cash advance to Corona in 2003 and that it allowed the transaction even when neither the Chief Justice nor his wife was in the list of shareholders.

Cataran testified that BGEI was registered with the SEC on May 30, 1961 and that the shareholders listed were Rosario vda Basa, Mario Basa, Cecilia Basa, Vicente Roco, Asuncion Basa Roco, Jose Ma. Basa and Raymunda Gorospe Basa.

According to Cataran, BGEI had not been submitting any its general information sheet or financial statement, as required by the SEC, since 1991. This prompted the SEC, Cataran said, to revoke the certificate of registration of the corporation on April 22, 2003.

Cataran noted that the reportorial requirement was contained in Sec. 141 of the Corporation Code of the Philippines.

“When the corporation failed to file an appeal, the revocation became effective. Then the existence is considered as none, it no longer exists,” Cataran said.

Cataran pointed out that the SEC has issued an opinion that once a registration is revoked, the corporation is already considered dissolved.

Once the revocation takes effect, Cataran said that the corporation has three years to wind up its operations and liquidate its assets.

Umali noted that in the 2003 SALN of Corona, under the section on business interests and financial connections, he listed BGEI as a family corporation of his wife and that this was engaged in real estate.

He said that the description of BGEI being engaged in real estate was never indicated in any records of the SEC or any other government agency.

Considering that the SEC has already declared BGEI as being dissolved, Umali argued that the corporation had no other business but to liquidate its assets.

As such, Umali said that providing cash advances to anybody would no longer be allowed.

No authority

Senate President and impeachment court presiding officer Juan Ponce Enrile told Cataran that the SEC has no authority to dissolve a corporation, saying such can only be achieved either by an act of the shareholders or by a co-warrant proceeding by the state.

Enrile said that he has a “grave doubt” on the authority being claimed by the SEC to dissolve corporations.

“I think you are misinterpreting the Corporation Law. I’m sorry to tell you but I am teaching you Corporation Law,” Enrile said.

Sen. Edgardo Angara said that there was a distinction between revocation and dissolution.

He said that the revocation of a certificate of registration does not result in the automatic extinction of the corporation because it still has three years to wind up operations.

“The revocation of registration simply means that you cannot do business as usual. You can still pay out money, if it is part of the distribution of investment,” Angara said.

Senate Minority Leader Alan Peter Cayetano argued that a corporation could still continue existing until the three-year deadline for liquidating is reached. He said that cash advances could still be made as a form of liquidation.

“If the point of all of this is to point out that the corporation is dead, then it is irrelevant. It doesn’t prove that they could not have given money to the spouses (Corona),” Cayetano said.

“It was clear that this was irrelevant,” Esguerra said of the cash advance issue. “On the allegation of the failure to disclose, the liability has been declared and disclosed by the Chief Justice and it went on for six years until there was no longer any entry on liability,” Esguerra said.

“They want to go further and establish that Basa Guidote, having been revoked, has no existence from a legal standpoint. But it was established by senator-judges that a corporation, in spite of revocation, can go on,” he added.

Sen. Joker Arroyo, a prosecutor in the impeachment trial of former President Joseph Estrada in 2000, told the prosecution panel to prepare better for its presentation before the court.

“You know I once sat on the table of prosecutors. If you’re not sure of your evidence, please don’t present them. That’s all,” Arroyo said.

Ownership confirmed

As this developed, Nerissa Josef, an assistant vice president of Ayala Land, testified on the veracity of the acquisition of Corona and his wife of a P3.588-million one-bedroom unit at The Columns in Makati City.

Esguerra said Corona had some problems with the unit even after the developer had considered it “delivered” as of June 11, 2008.

“I saw to my appreciation that it was adverse to them,” Esguerra said, referring to a handwritten note of Mrs. Corona regarding her problems with the unit.

Esguerra said even the witness failed to answer a query from Sen. Franklin Drilon as to when the Coronas got hold of the keys for the Columns condominium.

“Only in 2011, we will prove that,” Esguerra added after the hearing. “We will prove why they were not paying condominium dues,” the defense lawyer said.

Based on documents, Josef testified – while under questioning by private prosecutor Winston Gines -- that the one-bedroom unit at Tower 1 of The Columns was “deemed accepted” by Corona on June 11, 2008.

Josef also presented as evidence some documents such as contract to sell, official receipts, and the deed of absolute sale, and buyer information sheet.

Josef said the Coronas initially provided a down payment of P543,181.82 plus VAT on March 28, 2003; P1.013 million plus VAT on April 28, 2003; P1.728,270.23 on Oct. 10, 2003. Based on official receipts, Mrs. Corona paid the last installment of P290,922 on March 8, 2004 “as full payment” and for documentary tax and transfer taxes as well as service fees.

Sen. Francis Escudero asked if the deed of sale, once executed, should have been included in the SALN. “Definitely, yes, it is a statement made under oath,” the prosecution lawyer said.

During the hearing, Josef said she does not know where the keys of the unit are when asked by Drilon.

“As far as I know, they are already in possession of the unit,” Josef said, adding that the Coronas got the unit in 2008.

Sen. Sergio Osmeña also asked Josef how much discounts real property developers give to buyers. “Did any of the units get sold even at 20, 30 or 40 percent discount?”