PNB-Allied Bank merger a go after court favored Lucio Tan?

MANILA, Philippines – The almost 25-year ill-gotten wealth case of the government against tycoon Lucio Tan has been dismissed by the Sandiganbayan, according to the tycoon’s counsel.

Tan’s lawyer, Estelito Mendoza, said in a statement Wednesday, June 13, that this could pave the way for the long-delayed merger between two banks led by the tycoon: Philippine National Bank (PNB) and Allied Banking Corp.

The merger, which could likely result in lower operating costs that will allow the combined operations to be more aggressive in the competitive industry, has been held back due to the disputed shares in Allied Bank.

“The dismissal of the ill-gotten wealth complaint by the Sandiganbayan instituted by the PCGG in 1987, after nearly 25 years of litigation before the Sandiganbayan, should put to rest any claim that the assets of Lucio C. Tan have been acquired through illegal means,” Mendoza wrote.

“It is Dr. Tan’s hope that with this decision of the Sandiganbayan, the PCGG will relent in its effort to lay claim to his assets and in restricting the exercise of full rights over those properties,” he added.

The ill-gotten wealth case was filed by the Presidential Commission on Good Government (PCGG), the agency tasked to recover assets acquired illegally during the Marcos era.

Aside from Allied Bank, the other Lucio Tan-led companies involved are Fortune Tobacco Corp., Asia Brewery Inc., Foremost Farms, Himmel Industries Inc., Grandspan Development Corp., Silangan Holdings Inc., Dominium Realty & Construction Corp., and Shareholdings Inc.

The court actions on the cases, lumped under Civil Case No. 0005, were focused on two key issues:

• sequestration of the assets by the government
• ownership over these assets

On the sequestration issue, Mendoza stressed that the Sandiganbayan has already favored the Lucio Tan group in 1993 and 2006, while the Supreme Court have affirmed these in 1996 and 2007.

Lawyer Mendoza lamented that, despite these court decisions, the PCGG had opposed the merger of Allied Bank and PNB. In turn, the Bangko Sentral ng Pilipinas, Philippine Deposit Insurance Corp., and the Securities and Exchange Commission also did not give the merger the green light. – Rappler.com