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Criminal charges against Development Bank of the Philippines DBP officers

by PNA

The Office of the Ombudsman has upheld its resolution ordering the filing of two criminal charges against Development Bank of the Philippines officers.

The charges are in connection with DBP’s grant of two loans worth P660 million in 2009 to Deltaventures Resources, Inc.

In a review resolution signed Sept. 25, 2012, Ombudsman Conchita Carpio Morales found probable cause to indict DBP’s ex-officers Patricia Sto. Tomas, former Chairman;

Reynaldo David, former President & Vice-Chairman; former Directors Alexander Magno, Floro Oliveros, Miguel Romero, Franklin Velarde, Renato Velasco and Joseph Donato Pangilinan;

Edgardo Garcia, former Senior Executive Vice President (SEVP) & Chief Operating Officer; Armando Samia, former SEVP & Head of Marketing Sector; Rolando Geronimo, former SEVP; Perla Soleta, former Senior Assistant Vice President SAVP); Jesus Guevarra II, former SEVP & Marketing Head of the Brach Banking Sector (BBS);

Crescencia Bundoc, former VP & Head of Regional Marketing Center-Metro Manila (RMC-MM); Arturo Baliton, BBS Manager for RMC-Western Luzon; Nelson Macatlang, RMC-WL Chief Accounts Management specialist;

Marissa Cayetano, RMC-MM Assistant Manager; and private individuals Roberto Ongpin, DVRI General Manager; Josephine Manalo, DVRI President; and

Ma. Lourdes Torres, treasurer of Goldenmedia Corporation, for violation of Section 3(e) of Republic Act (RA) No. 3019 or the Anti-Graftnd Corrupt Practices Act, in relation to the grant of a P150-million credit line to DVRI.

Morales also found probable cause to indict Sto. Tomas, David, Magno, Oliveros, Romero, Velarde, Velasco, Garcia, Samia, Geronimo, Soleta, Guevarra, Bundoc, Baliton, Ongpin, Manalo, Torres along with Ramon Durano IV, former DBP director; Benedicto Ernesto Bitonio Jr., former EVP and Head of Finance Sector; Teresita Tolentino, former AVP; Rodolfo Cerezo, RMC-MM Assistant Manager; and Warren De Guzman, RMC-MM Assistant Manager, for another count of violation of Section 3(e) of RA 3019, in relation to the grant of a P510-million loan to DVRI.

The charges against Benilda Tejada, Josephine Jaurique and Justice Lady Flores were dismissed for insufficiency of evidence.

The DBP and 23 out of the 28 respondents filed separate motions for reconsideration on the said resolution.

In a 43-page order signed by Morales on Jan. 8, 2013, the Ombudsman partially granted Velasco’s motion and recommended the dismissal of the criminal charges against him in relation to the grant of the P150,000 loan to DVRI, as "the subject facility was processed and approved sometime in April 2009", while he only became a Director of the bank on Nov. 4, 2009.

However, Morales upheld the "finding of probable cause against Velasco for violation of Sec. 3(e) of RA 3019 in relation to the grant of the P510,000 loan to DVRI."

On the other hand, the Ombudsman denied the motions filed by DBP and the other respondents.

It reiterated that the loans were behest as they conform to some of the criteria in determining whether a loan is behest, laid down in Memorandum No. 61 dated Nov. 9, 1992, namely: a) DVRI was undercapitalized; b) the loans were undercollateralized; c) the project subject of the loans was not legally feasible; d) there was a resort to corporate layering; e) there was extraordinary speed in the processing and release of the loans; f) respondent Ongpin was a crony of respondent David; and g) DVRI’s loans were approved at the behest of respondent David, a highly-placed Senior Officer of the State-owned bank.

It also denied DBP’s motion arguing that respondents should not only be indicted for Violation of Sec. 3(e) of RA 3019, but also for Violation of Sec. 3(j) of the said law "because they extended loans to an undeserving borrower".

The order said that jurisprudence states that "prosecuting the offended for separate but identical offenses may violate his or her fundamental right against double jeopardy."

It explained that the offense penalized by Sec. 3 (j) of RA 3019 (granting or approving benefits, permits or privileges to persons not legally entitled thereto) is practically identical to the second mode of violating Sec. 3(e) of RA 3019 (giving unwarranted benefits to any other party).

The DBP also wanted to include Tejada in the charges because she "played a pivotal role in this grand conspiracy of extending behest loans" to DVRI.

But the Ombudsman said that there is no proof indicating that Tejada’s legal advice on the said loans were sought.

The case arose from the complaint filed in August 2011 by DBP represented by its chairman, Jose Nuñez, and its president and chief executive officer, Francisco Del Rosario, Jr. for violations of Sections 3(e), (g), (j) of RA 3019, RA 8791, and other banking regulations against the 28 respondents who allegedly participated in the grant of ”behest” loans in the sum of P660 million under relaxed concessions used in the purchase of DBP-owned shares in Philex Mining Corporation, all orchestrated in a span of less than a year.

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