Senate to discuss fraud case with Metrobank, AMLC, BSP

MANILA, Philippines – The executives of the Metropolitan Bank and Trust Company (Metrobank), Anti-Money Laundering Council (AMLC), and Bangko Sentral ng Pilipinas (BSP) will face the Senate committee on banks, financial institutions, and currencies after a former senior official of Metrobank allegedly committed internal fraud involving P900 million to P2.5 billion.

Senator Francis Escudero, the committee chairman, said in a statement on Tuesday, July 25, that the panel will not yet launch an investigation and would like to see first how the inquiry being conducted by Metrobank along with the National Bureau of Investigation (NBI) will turn out.

Instead, Escudero will call the officials of Metrobank, AMLC, and the BSP to a meeting for the Senate committee to be informed about the developments of the case and determine if there are loopholes in the safety mechanisms and procedures for banks. (READ: Metrobank loses over P14B in market value amid fraud issue)

“I want to be enlightened and I want to hear it straight from Metrobank. I want to know how the bank executive was able to commit such a massive scale of fraud even with the bank’s internal control and checks and balances,” Escudero said.

The suspect, Maria Victoria Lopez, was arrested through an entrapment operation conducted by the NBI last July 17. Lopez is the head of the corporate services management division of Metrobank’s head office.

According to the NBI, Lopez supposedly fabricated documents and facilitated the disbursement of loans into fake accounts under the name of one of their corporate clients, the Gokongwei-led Universal Robina Corporation (URC).

Through the P25-billion credit line of URC, Lopez was able to process loans amounting to P900 million and P850 million.

According to reports, the suspect was able to release the loans “in tranches of P30 million” for the bank to have lost as much as P2.5 billion.

Meanwhile, the Gokongwei-led URC said in a separate disclosure last week that it would not be affected financially by the fraud.

Questions abound

The anomaly was only discovered when Metrobank noticed irregularities in the supposed letter request from the client, which asked the bank to issue a P2.25-million manager’s check to an individual payee as interest payment.

After verifying with URC, the company said it was not aware of the letter or of the account where the payment would be debited. (READ: Banking sector backs Metrobank to pull through P900-M fraud case)

“So what we want to know now is how often the audit happens, from the side of the BSP and the bank itself.  How come the bank did not detect what was going on at the early onset?” Escudero asked.

Metrobank and the NBI are also looking into the possibility that the suspect connived with other bank employees in committing the fraudulent transactions.

Aside from the full-blown investigation by Metrobank and the NBI, a separate probe will also be done by AMLC, under the supervision of the BSP, to check Metrobank’s internal controls.

Escudero said they will await results of the investigations and from there, decide whether or not a Senate probe would still be necessary.

“We expect banks to immediately detect red flags in their system and immediately resolve internal matters. Apart from ensuring that the culprit will be brought to justice, Metrobank must assure its clients they have a robust internal control framework and that they will rigorously monitor their system,” he said.

Lopez has been charged with qualified theft, falsification, and violation of the General Banking Law before the Makati City Prosecutor’s Office. – Rappler.com