13 DBP officials sacked over P660-M loans to Ongpin grp

Ombudsman Conchita Carpio Morales orders the dismissal from service of 13 officials of state-run Development Bank of the Philippines (DBP) for granting P660-M loans in 2009 that she considered 'behest' or illegal

MANILA, Philippines – Ombudsman Conchita Carpio Morales has ordered the dismissal from service of 13 officials of the state-run Development Bank of the Philippines (DBP) for granting P660 million loans in 2009 that she considered “behest” or illegal.

In a press release on Thursday, December 6, the Ombudsman’s office said Morales signed the 54-page decision on November 21, sealing the fate of the bank officials involved in the two separate loans — P150 million in April 2009 and P510 million in November 2009 — to Deltaventures Resources, Inc. (DVRI), a firm controlled by Roberto V. Ongpin, a former trade secretary and one of the 6 Filipino billionaires in the Philippines.

These were the same loans that the Senate committee on banks and financial institutions had probed in 2011 to early 2012. The bank-led investigation in mid-2011 on these loans also led to the suicide of one of the bank lawyers, Benjamin Pinpin, in August 2011.

The DBP loans were used by Ongpin-led firm firms to partly acquire Philex Mining Corp shares from the group of another businessman, Manuel V. Pangilinan, who was then consolidating his control of the country’s top miner.

The Ongpin group made fat profits from the trading of the Philex shares, while DBP did not, said the Ombudsman order. The state-run bank also waived some checks and controls to expedite the processing of the loans.

DBP sold to Ongpin-led DVRI in November 2009 its 50 million shares in Philex at only P12.75 per share. DVRI then used the loan proceeds, also from DBP, to purchase the Philex shares from another Ongpin-led firm, Golden Media Corp.

In just a span of one month or in December 2009, the Ongpin-led firms sold the same Philex shares at P21.00 per share, or at almost double the value.

(Background: Anatomy of a behest loan)

“Respondents deliberately participated in the haphazard and hurried processing and granting DVRI’s loans, though obviously aware of doubts regarding the borrower’s capacity to repay the loans, and the significant exposure facing he bank in relation thereto. Despite the irregularities surrounding the DBP-DVRI transactions, they insisted that the loans were not objectionable since the bank allegedly made a substantial profit therefrom.”

“The  Ombudsman concluded that the said 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 09 November 1992, namely:”

  1. It is under-collateralized.
  2. The borrower corporation is undercapitalized.
  3. Direct or indirect endorsement by high government officials like presence of marginal notes.
  4. Stockholders, officers or agents of the borrower corporation are identified as cronies.
  5. Deviation of use of loan proceeds from the purpose intended.
  6. Use of corporate layering.
  7. Non-feasibility of the project for which financing is sought.
  8. Extra-ordinary speed in which the loan release was made.

The following dismissed DBP officials were found administratively liable for Grave Misconduct and Conduct Prejudicial to Best Interest of the Service:

  1. Benedicto Ernesto Bitonio Jr., former Director 
  2. Alexander Magno, former Director
  3. Renato Velasco, former Director
  4. Franklin Velarde, former Director
  5. Edgardo Garcia, Senior Executive Vice President (SEVP) & Chief Operating Officer 
  6. Jesus Guevarra II, former SEVP & Marketing Head of the Brach Banking Sector (BBS)
  7. Crescencia Bundoc, former VP & Head of Regional Marketing Center-Metro Manila (RMC-MM) 
  8. Arturo Baliton, BBS Manager for RMC-Western Luzon
  9. Nelson Macatlang, RMC-WL Chief Accounts Management specialist 
  10. Marissa Cayetano, RMC-MM Assistant Manager 
  11. Teresita Tolentino, former AVP 
  12. Rodolfo Cerezo, RMC-MM Assistant Manager
  13. Warren de Guzman, RMC-MM Assistant Manager 

They were also meted with “accessory penalties of cancellation of their eligibility, forfeiture of their retirement benefits, perpetual disqualification from holding public office and barring them from taking civil service examinations.”

On the other hand, the criminal aspect of the case against the following was dismissed since the Ombudsman found “no substantial evidence to support the administrative charges” against: 

  • Josephine Jaurigue
  • Justice Lady Flores
  • Benilda Tejada

Meantime, the administrative charges against the following were dismissed since they were already not in service when the complaint was filed:

  • Reynaldo David, former President & Vice-Chairman 
  • Patricia Sto. Tomas, former DBP Chairman 
  • Joseph Donato Pangilinan, former Director 
  • Miguel Romero, former Director
  • Floro Oliveros, former Directors
  • Ramon Durano, former Directors
  • Armando Samia, former SEVP & Head of Marketing Sector 
  • Rolando Geronimo, former SEVP
  • Perla Soleta, and former Senior Assistant Vice President (SAVP) 

In September, Ombudsman Morales ordered the filing of violation of the Anti-Graft and Corrupt Practices Act against these respondents.

The case stemmed from the complaint filed in August 2011 by DBP chairman Jose Nuñez and its then president and CEO Francisco Del Rosario, Jr. against those who allegedly participated in the grant of ”behest” loans under relaxed conditions when the bank entered into debt-turned-share-sale transactions with the Ongpin group. – Rappler.com

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