THE Philippine Deposit Insurance Corp. (PDIC) on Monday, July 6, filed criminal charges with the Department of Justice against 20 former officers and stockholders of the now-closed Banco Filipino Savings and Mortgage Bank (BF) for unsound practices that led to its closure in 2011.
The complaint also states that the manner in which they conducted business resulted in an estimated P1.4 billion in losses to the bank.
PDIC, in the complaint, alleged that “in 2001, the respondents took advantage of their positions and connived with officers and stockholders of Banco Filipino and its related entities to sell the bank’s head office property to BF Homes for P685 million and use the bank’s funds to pay for the purchase.”
“The alleged sale took place when BF Homes did not have the financial capacity to pay for the sale, having been under rehabilitation,” PDIC claimed.
Several officers in related entities – BF Citi, BF Homes, BF General, Glamor and Vastland – were also charged.
Loans were allegedly secured by overvalued properties of the three BF entities and were supposedly to be used by Glamor and Vastland to acquire and develop real estate properties in Cavite.
The PDIC said Banco Filipino records indicated that the bank “granted questionable loans in favor of Vastland and Glamor” despite the fact both allegedly had “negative credit standings with at least 20 other banks.”
The loan money was allegedly diverted to fund the checks of BF Homes, which were used to pay for the purchase of the head office premises, Rappler reported.
Transactions show that Banco Filipino used its own money to purchase its own property.
The sale was allegedly made so the bank could save on overhead. Individuals involved planned to relocate its service offices to more affordable property in Las Piñas as a way to earn money to justify the sale of the head office property. However, the bank rented the head office from BF instead of moving until the business was ordered closed in 2011.
From 2001 to 2011, the lender rented the property from BF Homes at a cost of P844.7 million. The complaint states that the charged officers and stockholders made the bank pay BF homes rental fees that were higher than rates during the time period.
The respondents “orchestrated other fraudulent activities and irregular transactions over the same 10-year period,” the PDIC noted.
Albert Aguirre, owner and vice chairman of Banco Filipino, along with the others have been charged with violating Republic Act 3591 (PDIC Charter) and Republic Act 8791 (General Banking Law of 2000, which, among other things, provides for the regulation of the organization and operation of banks, quasi-banks, and trust entities).
The PDIC, established in 1963 by Republic Act 3591, insures the deposits of all banks and promotes financial stability. It said it filed the complaint to protect the depositing public, and to bring to justice parties that engage in acts that put the Deposit Insurance Fund and depositors at risk, Rappler reported.
“PDIC continues to pursue legal actions against bank officials and personnel who engage in unsafe and unsound business banking practices that pose grave threats to the stability of the country’s banking system,” the agency said. (With reports from ABS-CBN News, Inquirer, InterAksyon, Philstar and Rappler)
