Prosecution: Important to prove “fictitious” loan

If the loan is proven to be fictitious, the Chief Justice will find it harder to explain how he acquired expensive properties

MANILA, Philippines – Althought it won’t weaken their case, the prosecution panel said on Wednesday, February 1, it’s important for them to prove that Chief Justice Renato Corona’s P11-M loan from Basa-Guidote Enterprises Inc is “fictitious.”

Importante ito. Kung walang pinanggalingan ang pinambili ng properties, sila (defense) ngayon magpapakita sa amin kung binili ang assets. The crux of Article 2 is non-disclosure,” prosecutor Reynaldo Umali told Rappler. (This is important. The defense has to establish how [the Coronas] managed to buy the assets if they had no means to buy the properties.)

The prosecution maintains that with his maximum annual income of about P600,000 (based on his tax records), the Chief Justice could not possibly afford the expensive condominiums that he has acquired.

Whether or not it is fictitious remains to be settled. Day 10 of the impeachment trial was bogged down by debates on legal interpretations and terminologies.

Securities and Exchange Commission (SEC) director Benito Cataran testified that they revoked the certificate of registration of Basa-Guidote in 2003. He said the company is, in effect, “dissolved” and should no longer operate as a business that is able to extend a loan.

The Chief Justice declared in his 2003 Statement of Assets, Liabilities and Net Worth (SALN) the P11-M loan from the company owned by his wife’s family. Based on his succeeding SALNs, the Chief Justice appeared to have continued transactions with Basa-Guidote. He completed payments for the loan in 2009.

Dissolution or revocation

But presiding officer Senate President Juan Ponce-Enrile cast doubts on the SEC’s power to “dissolve” a company. Although he did not insist on his legal opinion, Enrile said the company could continue operations despite revocation of its franchise.

Cataran was firm. Citing legal opinions of the SEC Office of the General Counsel, a corporation with a revoked franchise is considered “dissolved.” It needs to wind down operations and should not continue to make profits.

In the end, the Senate impeachment court asked the SEC official to submit legal memorandum to explain his position that a revoked corporation is a dissolved corporation.

The same debate on legal interpretations bogged down the testimony of Ayala Land assistant vice president Nerissa Josef on Corona’s condominium unit in The Columns.

Based on the Deed of Absolute Sale dated October 2003, the prosecution said the Makati condominium should have been declared in Corona’s 2005 SALN. Citing SC decisions, the prosecution said a property is considered transferred when the Deed of Absolute sale is executed.

But the defense said the unit was not “actually accepted” until 2009. The buyers, the Chief Justice and his wife, refused to accept the condominium because of certain defects in the unit.

In the end, the Senate impeachment court asked the prosecution and the defense to submit legal memoranda on the issue.

But the issue is simple, said prosecution spokesperson Juan Edgardo Angara. At the very least, the presentation on Wednesday showed that the Chief Justice undervalued the Makati condo.

“We showed that there’s a condominium in Makati that he bought for P3.5-M. It was declared for the first time in his 2010 SALN. It’s worth P1.2 million,” he said.

“If you check documents, we don’t see any condo worth P1.2 million,” he added.

Lead prosecutor Niel Tupas Jr said they hope to finish presentation of evidence for Article 2 on Thursday or Monday next week, February 6. – Rappler.

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