Let courts, not Congress resolve 'behest' loan case

It seems that a well-entrenched clique from the bygone martial law era is hard at work conspiring to fight tooth and nail the zero-tolerance policy of President Benigno “Noynoy” Aquino III against all forms of corruption wherever it may be found. Such is the apparent morality play behind the high-profile scandalous circumstances surrounding the grant by the state-owned Development Bank of the Philippines (DBP) of P660 million in alleged “behest” loans to Marcos era Trade Minister Roberto V. Ongpin purportedly for the purchase of Philex Mining shares.

Last August 5, DBP filed criminal and administrative cases against its past board led by chairman Patricia Santo Tomas, president Reynaldo David, and Ongpin, in connection with the alleged P660-million behest loans that the bank had granted to the Ongpin company, Delta Ventures Resources Inc. (DVRI), to finance his acquisition of Philex Mining shares.

In their joint complaint affidavit, DBP chairman Jose Nuñez and president Francisco Del Rosario Jr. alleged that the past board extended two behest loans of P150 million and P510 million to the Ongpin company, DVRI, despite its having only P625,000 in paid-up capital.

The new DBP management charged Ongpin used the DBP facility to buy a block of Philex Mining shares at P12.75 a share, which he later sold as part of a bloc at P21 per share. “That the [second] P510-million loan applied for by this puny company was approved by the risk management committee, the executive credit committee, and the board all in one day makes it doubly suspicious,” the complaint stated.

According to the Commission on Audit (COA), the transaction deprived the bank of an opportunity trading gain of P412.4 million. The complainants also accused the past DBP board members and respondent-bank officers of violating banking laws, exposing the bank to high lending risks and favoring certain private individuals who profited from these loan and trading transactions.

Ongpin, however, strongly took exception to the charges and accused the incumbent DBP management of misleading the public about his company’s financial standing. He cited the stockholders’s equity of DVRI was already P114 million in 2008. When the DBP loan was made in 2009, Ongpin claimed, the stockholder’s equity already grew to more than P1 billion.

Ongpin argued that DVRI’s paid-up capital had absolutely no significance to the loan. The most critical consideration in granting a loan, Ongpin further argued, is the collateral provided by the borrower. He claimed his company’s questioned loan from the DBP was “secured by collateral valued at more than P1.87 billion which was 2.77 times the loan amount which is far superior to DBP’s and other banks’ requirement of two times cover.”

“For obvious reasons, they (new DBP management) simply ignore the fact that these loans were completely above board, fully collateralized, have been fully paid and in fact were extremely profitable loans for DBP,” Ongpin pointed out.

But Ongpin’s own explanation was an obvious attempt to pull the wool over our eyes over the glaring facts on how he got the behest loans while he wielded his influence during the previous administration of former President Gloria Macapagal-Aroyo. It was no trade secret how Ongpin openly flaunted his being close to the President’s husband, former first gentleman Mike Arroyo.

Ongpin has no one to blame but himself for the troubles he is now faced with under the “Tuwid na Daan” of P-Noy. Using his clout as a crony businessman, Ongpin certainly got what he wanted from the former DBP management, specifically from David who incidentally was also on the board of Philex Mining.

What was a mere legal case had a dramatic twist after Benjamin Pinpin, an assistant vice president of DBP, was found hanging by a nylon cord in the bathroom of a budget hotel in Las Piñas last month. In the suicide note addressed to his family, Pinpin wrote his problem in his job at the DBP was his reason for taking his life and specifically mentioned his being made to sign an affidavit that supposedly went beyond the truth.

This incident prompted President Aquino to order Finance Secretary Cesar Purisima to review the investigation processes done in this loan case that supposedly pushed the late DBP executive to commit suicide. The Finance secretary is the immediate supervisor of government financial institutions like the DBP.

In stepping into this case, the Chief Executive instructed Purisima to review the investigations conducted by the current DBP board and to see if they have been “overzealous” in their efforts to obviously please him. “If they have been overzealous… we will rein them in,” President Aquino declared to assuage the public.

Interviewed earlier this week over dzRH radio station, the Finance secretary noted there was nothing in the affidavit of Pinpin that could have driven the late DBP executive to commit suicide.

The suicide though struck a sore note on the alleged “behest” loan case in the DBP that came out after P-Noy delivered his State of the Nation Address (SONA) in Congress last July when he reiterated his “no wang-wang” policy would not just be enforced on the road but also applied in all sectors of governance. Let us only hope that President Aquino’s “no-wang-wang” policy also applies in the banking sector and those who violate its rules are taken to task for such criminal acts as in this case at bar.

The House minority bloc led by Arroyo ally Senior Deputy Minority Leader Danilo Suarez issued a statement that they would file a resolution for the House to investigate the alleged bullying of the Aquino administration officials that led to the suicide of Pinpin. On the other hand, pro-Aquino lawmakers led by Niel Tupas, chairman of the House justice committee, have sought a congressional inquiry into what they described as questionable lending and unsound banking practices of the past DBP officials.

This alleged behest loan case filed by the DBP against Ongpin et.al. bears watching because clearly there is a moral, legal, and even political play here between two administrations. The courts, not Congress, would be the more independent body to serve the public interest in the search for true justice in this behest loan case.