Ombudsman to probe Pichay, other water execs

A+
A
A-
Prospero Pichay

Former Surigao del Norte Rep. Prospero Pichay Jr.: Under Ombudsman probe. INQUIRER file photo

MANILA, Philippines—Ombudsman Conchita Carpio-Morales has formed a five-member team of lawyers to handle the case against dismissed officials of the Local Water Utilities Administration (LWUA) led by former Surigao del Norte Rep. Prospero Pichay Jr. who are facing criminal and administrative charges for allegedly injecting some P800 million of LWUA funds into an insolvent bank owned by plastics tycoon William Gatchalian in 2008 and 2009.

Morales ordered the panel to conduct a preliminary investigation and administrative adjudication of all related charges filed against Pichay and the other dismissed LWUA officials—Eduardo A. Bangayan, Aurelio O. Puentevella, Enrique Senen G. Montilla III, Wilfredo M. Feleo Jr. and Daniel A. Landingin.

The probe will also cover the shareholders of the shuttered Express Savings Bank Inc. (ESBI) led by Valenzuela Rep. Sherwin T. Gatchalian, Dee Hua T. Gatchalian, Elvira A. Ting, Kenneth T. Gatchalian; the directors of the Wellex Group led by William T. Gatchalian and Yolanda de la Cruz; and Forum Pacific directors Arthur R. Ponsaran, Geronimo Velasco Jr., Peter Salud, Rogelio D. Garcia, Federico Puno, Lamberto Mercado Jr., Weslie T. Gatchalian, Joaquin Obieta and Evelyn de la Rosa.

The Pichay and Gatchalian groups have been charged with graft and malversation.

The case stemmed from the purchase by the LWUA board, chaired by Pichay, of 445,377 ESBI shares worth P101.363 million from the Gatchalian group in a financial rescue operation that gave the agency a 60-percent equity in the bankrupt bank.

The board went ahead with the deal despite warnings from the political opposition, the Bangko Sentral ng Pilipinas, the Monetary Board and Department of Finance about the ESBI’s fragile financial condition following a due diligence review that showed high liquidity and credit risks.

Pichay and the LWUA board later authorized a further infusion of P400 million for investments and P300 million for deposits.

Pichay and the LWUA officials were ordered dismissed by the Ombudsman on July 4, 2011. Four days later, the Philippine Deposit Insurance Corp.  placed the ESBI under receivership.

The bank, which had four branches in Laguna, had 2,673 deposit accounts worth P608.36 million four months before it was closed.

Disclaimer: The comments uploaded on this site do not necessarily represent or reflect the views of management and owner of INQUIRER.net. We reserve the right to exclude comments that we deem to be inconsistent with our editorial standards.

To subscribe to the Philippine Daily Inquirer newspaper in the Philippines, call +63 2 896-6000 for Metro Manila and Metro Cebu or email your subscription request here.

Factual errors? Contact the Philippine Daily Inquirer's day desk. Believe this article violates journalistic ethics? Contact the Inquirer's Reader's Advocate. Or write The Readers' Advocate:

c/o Philippine Daily Inquirer Chino Roces Avenue corner Yague and Mascardo Streets, Makati City,Metro Manila, Philippines Or fax nos. +63 2 8974793 to 94

editors' picks

advertisement

popular

advertisement

videos