MANILA, Philippines - The Supreme Court ordered the Manila City Regional Trial Court (RTC) to push through with the criminal prosecution of business tycoon Jose C. Go for allegedly guaranteeing loans and borrowing deposits from Orient Commercial Bank without the approval of the bank’s board of directors.

Go, who owns Ever Gotesco mall and Orient Bank, is alleged to have borrowed some P2.75 billion in deposits without the written approval of the majority of the bank’s board.

Orient Commercial Bank has been placed under receivership and eventually closed in 1999.

In a 13-page decision, the high court, through Associate Justice Arturo Brion, nixed the petition filed by Go against a Court of Appeals decision in 2006. The appeals court reversed an earlier decision by the Manila RTC.

Go argued that General Banking Act (or Republic Act 337) filed against him by the Bangko Sentral ng Pilipinas penalized only directors and officers of banking institutions who acted either as borrower or as a guarantor, but not as both.

But the high court, in its ruling, said Section 83 of R.A. 337 generally prohibits a bank director or officer from becoming an obligor of the bank without securing the necessary written approval of the majority of the bank’s directors.

“To make a distinction between the act of borrowing and guarantying is therefore unnecessary because in either situation, the director or officer concerned becomes an obligor of the bank against whom the obligation is judicially demandable,” the high court explained.

Even assuming that the information filed against Go do not constitute an offense, the high court said it was erroneous for the Manila court to immediately dismiss the case without giving the prosecution a chance to amend the complaint.

The high court said, Section 4 of Rule 117 of the Rules of Criminal Procedure requires that the prosecution should be given a chance to correct the defect and the court can order the dismissal if the prosecution failed to do so.