MANILA, Philippines?A prominent information technology expert sued by his former business partner for allegedly defrauding their company yesterday defended his actions, saying that the dispute arose simply because of a disagreement on which creditors to prioritize in settling the firm?s debts.

In a letter to the Inquirer, Augusto ?Gus? Lagman said that his dispute with businesswoman Nora Bitong was due to ?our disagreement regarding the disposition of the funds earned from the sale of our company?s shares in another corporation (Vinta Systems, Inc.).

The company, Systems Standards Inc. (SSI), sold its stake in a subsidiary Vinta Systems Inc. to a US-based investor, with Bitong also alleging that the transaction was done without her approval as a majority shareholder.

?Ms Bitong wanted her and me, as the biggest creditors, to be paid at the same time as the creditor banks, on a pro rata basis,? Lagman said. ?But while she and I are creditors, we are also board directors and the major shareholders of the company.?

?We, the majority of the directors, wanted the bank loans of SSI to be paid first and the shareholders and creditors, after, should there be a balance left from the funds,? he added. ?We believed that that would be more moral and ethical.?

Lagman explained that Bitong filed an estafa case against SSI?s director after she failed to ?get what she wanted.?

?The case was quickly dismissed by the Makati prosecutor (some two years ago) for lack of probable cause, but recently reversed by the Department of Justice in mid-June, 2010, just a month ago (one of the ?midnight? DOJ decisions),? he said.

According to him, Bitong was ?not the majority owner? of SSI, since she only owned 40 percent of the stocks, while 60 percent was owned and controlled by Lagman?s group.

He added that the sale of Vinta Systems to Aureos Capital was approved by the majority of the SSI board, and that Bitong?with her 40 percent stake?could not have stopped the deal, even if she was present during that crucial July 3, 2006 meeting.

Lagman pointed out that, from 2007 to 2009 after the sale of Vinta shares, he was able to negotiate the full settlement of all SSI bank loans, except for one worth P4 million.

?Almost all of the banks [agreed] to condone the interest and penalties on the loans, amounting to approximately P70 million, and even agreeing to a 50-percent [average] discount on their principal amounts,? he said.

?Thus, in the last few years of SSI, I was able to save the company some P70 million [in interest and penalties], plus P25 million [in principal loans], plus another P15 million from its capital commitment in Vinta,? Lagman said. ?How can Ms Bitong say that I disadvantaged SSI??