Ombudsman: Why was PNB-Allied merger OKd?

MANILA, Philippines – The Office of the Ombudsman has ordered various regulators who approved the merger of two bank banks controlled by Lucio Tan, the Philippines 2nd richest, to file their comment on a criminal and administrative complaint filed by against them.

The regulators were asked to answer the claims filed by heirs of the original shareholders of Allied Bank meant to stop on the last minute the February 9 merger between Allied and Philippine National Bank (PNB).

In a two-page February 25 order released on Thursday, March 7, Assistant Ombudsman Marilou B. Ancheta-Mejica of the Preliminary Investigation Administration Adjudication and Monitoring Office II, ordered the following regulators to submit their and their witnesses’ affidavit:

• Armando M. Tetangco, Jr., Governor of BSP and Chairman of the Monetary Board
• Cesar V. Purisima, member, Monetary Board
• Alfredo C. Antonio, member, Monetary Board
• Ignacio R. Bunye, member, Monetary Board
• Peter B. Favila, member, Monetary Board
• Felipe M. Medalla, member, Monetary Board
• Armando L. Suratos, member, Monetary Board
• Teresita J. Herbosa, Chairperson, SEC
• Valentin A. Araneta, President, PDIC

Complaint

Former Iloilo City mayor-in-charge Rosa Caram, a widow Genbank stockholder, and the two sons of Genbank founder Clarence Yujuico — Aderito and Joselito — said in their January 30 complaint to the Ombudsman that the merger should not proceed because they are still contesting Tan’s ownership of Allied Bank shares.

They are asserting that Tan acquired control of Genbank (before renaming it Allied Bank) through favors the Marcos government gave to Tan in the 1970’s, when the Central Bank took over Genbank following the grant of P310 million emergency loan.

Go-signal for merger

In 2012, the 3 regulatory bodies separately approved the merger, which was held back for years by legal issues over disputed shares in Allied Bank.

The Sandiganbayan dismissed in June 2012 the almost 25-year ill-gotten wealth case of the government against tycoon Lucio Tan since the government lawyers presented inadequate evidence against Tan and his co-defendants. In September 2012, the anti-graft court affirmed this decision. 

The merger will create the country’s 4th largest privately owned bank. PNB will be the surviving entity and will have a network of 646 branches nationwide, total assets of P514 billion.

The PNB announced new leaders on February 11. – Rappler.com