PDIC head appeals Ombudsman’s suspension order

The head of the Philippine Deposit Insurance Corp. (PDIC) has asked the Office of the Ombudsman to reverse an administrative order suspending him for simply posing no objection to a "perfected contract" between two government agencies.

PDIC president Norberto Nazareno said that even if he posed an objection, the outcome would have been the same.

In his motion for reconsideration, he said former Ombudsman Aniano Desierto’s order on July 22 this year suspending him for a month and a day is "anchored on the wrong factual premise and on a mistaken application of the law."

He said the reasons cited by Desierto for suspending him were the same reasons cited in dismissing a similar case against him in another order issued two days later on July 24.

The case stems from the transfer of P562.5 million worth of promissory notes issued by the National Food Authority from Urban Bank Inc. to the Land Bank of the Philippines two years ago.

Prior to its closure on April 26, 2000, Urban Bank had been trying to raise cash to service manager’s checks which it issued to various investors of Urbancorp Investments Inc.

The bank eventually ran out of money to meet withdrawals and its management was forced to declare a bank holiday. The Monetary Board then closed it down and ordered PDIC to act as a receiver.

But before its closure, Urban Bank "assigned and physically delivered" the NFA’s promissory notes to Landbank pursuant to a deed of assignment notarized on March 29, 2000.

In the second decision involving the criminal case against Nazareno, the Ombudsman confirmed Landbank’s "authority to enforce collection on the subject NFA promissory notes on the basis of the perfected deed of assignment executed by Urban Bank in favor of Landbank...before the closure of Urban Bank."

The Ombudsman also concluded that the deed of assignment "granted Landbank full rights to enforce collection on the subject NFA promissory notes."