Rep. Gatchalian pleads ‘not guilty’ to raps in bank case
Valenzuela Rep. Weslie Gatchalian (left) has pleaded not guilty to charges related to the sale of the family owned bank to the Local Water Utilities Administration. Photo was taken on June 20, 2016, when Gatchalian visited Camp Bagong Diwa. PHOTO FROM WES GATCHALIAN FACEBOOK PAGE
Valenzuela City Rep. Weslie Gatchalian, brother of Sen. Sherwin Gatchalian, pleaded not guilty on Wednesday to charges of graft, malversation and violation of bank regulations over the allegedly anomalous buy-out of a bank which his family co-owns.
Gatchalian attended his conditional arraignment before the Sandiganbayan Fourth Division on Wednesday for the court to resolve his motion for leave to travel to China with President Rodrigo Duterte.
READ: Rep. Gatchalian asks court nod to travel to China with Duterte
In his motion to travel, Gatchalian said he would be part of the trade mission of the Bases Conversion Development Authority. He would be gone from Oct. 18 to 22.
Gatchalian through his lawyers said he would advise the President in discussions with the Chinese.
He added that Speaker Pantaleon Alvarez endorsed him for the trip.
“As part of the President’s entourage, Cong. Gatchalian will assist and advise the President during his discussions with Chinese delegates on matters of economic, political and trade relations,” he said in his motion.
Gatchalian added that he would join the delegation in his capacity as chair of the House of Representatives trade and industry committee.
Gatchalian said he would inform the court of his itinerary once Malacañang released the details of the trip.
He said he would be willing to post a travel bond and comply with other requirements for the travel.
“From the foregoing, Cong. Gatchalian humbly beseeches this Honorable Court to allow him to travel to the People’s Republic of China from 18 to 22 October 2016,” his motion read.
Gatchalian is a co-accused in the cases for graft, malversation and violation of the bank manual involving members of his family over the allegedly anomalous buyout of the family’s insolvent bank by the Local Water Utilities Administration (LWUA).
READ: Gatchalian seeks dismissal of LWUA case | Pichay seeks dismissal of bank buyout case
He, his brother in the Senate and their parents: so-called “Plastics King” William Gatchalian and Dee Hu Gatchalian, were each accused of one count of violation of Section 3(e) of Republic Act No. 3019 or the Anti-Graft and Corrupt Practices Act, one count of Malversation of Public Funds as defined under Article 217 of the Revised Penal Code, and one count of violation of the Manual of Regulation for Banks (MORB).
They were charged as executives of Wellex Group Inc., which co-owns the insolvent bank Express Savings Bank Inc. (ESBI).
Meanwhile, then LWUA chair now Surigao Del Sur Rep. Prospero Pichay Jr. was charged with three counts of graft, three counts of malversation, one count of violation of the MORB and one count of violation of Republic Act 8791, or General Banking Law of 2000, for leading the purchase by LWUA of the insolvent bank to save it from bankruptcy.
The Gatchalians and Pichay have yet to be arraigned.
READ: Gatchalian clan attends arraignment in LWUA case | Arraignment of Gatchalians, Pichay reset anew
According to the Ombudsman, Pichay and other LWUA officials approved the acquisition of the insolvent bank in 2009 despite audit findings that show that the bank suffered net losses and capital deficits for five straight years from 2005 to 2009.
The acquisition took the effect of a financial rescue, as the LWUA officials bought 445,377 ESBI shares worth P101.363 million from the Gatchalian group that gave the agency 60-percent equity in the bankrupt bank.
Pichay and the other officials later injected P780 million LWUA funds to the bank to increase its authorized capital stock.
The Gatchalians of Wellex and other owners of the bank were also paid P80 million in the acquisition.
READ: Gatchalians say raps a political vendetta | Gatchalian, Pichay face criminal raps over bank buyout
The LWUA made the acquisition and transactions despite warnings by the Bangko Sentral ng Pilipinas (BSP), the Monetary Board of the BSP, and the Department of Finance (DOF) about the ESBI’s fragile financial condition following a due diligence review that showed high liquidity and credit risks.
The acquisition was also made without the requisite regulatory approvals from the BSP, its Monetary Board, the DOF and the Office of the President.
In ordering the filing of charges to the Sandiganbayan, Ombudsman Conchita Carpio-Morales said “in view of the bank’s precarious financial standing at the time of the sale, the windfall received by herein private respondents must be deemed unwarranted benefit, advantage or preference.” CBB
READ: Winning senator Gatchalian indicted over anomalous bank deal
