The Development Bank of the Philippines (DBP) filed in August 2011 a criminal complaint of graft and violation of banking laws against 25 past and current officers, and three private persons in connection with the grant of P660 million in alleged behest loans during the Arroyo’s administration.
The complaint filed in the Office of the Ombudsman was signed by Jose Nuñez and Francisco del Rosario Jr., DBP chair and president, respectively.
Among those named in the complaint were businessmen Roberto Ongpin; former DBP president Reynaldo David; former DBP chief operating officer Edgardo Garcia; and former DBP directors Patricia Sto. Tomas, Ramon Durano IV, Alexander Magno, Floro Oliveros, Joseph Pangilinan, Miguel Romero, Franklin Velarde and Renato Velasco.
The case stemmed from DBP’s grant of P510-million and P150-million loans to Delta Ventures Resources Inc. (DVRI), allegedly with undue haste, and in violation of its own lending policies and Bangko Sentral ng Pilipinas regulations.
DVRI was formerly led by Ongpin, trade minister of the late dictator Ferdinand Marcos. David headed DBP during the Arroyo years.
In the complaint, DBP questioned the grant of P510-million loan to a “puny company” that had a paid-up capital of only P625,000. Moreover, the fact that “it was approved by the RMC credit committee, the executive credit committee and the board of directors of DBP all in one day makes it doubly suspicious,” DBP said.
Ongpin used the loan to buy Philex Mining Corp. shares at P12.75 per share, which he then sold a month later to Manuel V. Pangilinan’s Metro Pacific Group as part of a bloc at P21 per share.
Ongpin and Pangilinan were both sitting on the Philex board when the DVRI purchased the DBP’s Philex shares. In essence, Ongpin had obtained a loan from the DBP and used it to buy the bank’s Philex shares.
The transaction deprived the government bank of an opportunity trading gain of P412.4 million, DBP said in the complaint.
Ongpin denied the allegations, adding that the DBP actually profited with the interest from the loan, which he said, was repaid way ahead of its maturity and was fully backed by collateral.
David maintained that the transactions were done completely in good faith.
The inquiry into DBP transactions was led by Finance Secretary Cesar Purisima on the directive of President Aquino.
The investigation allegedly spurred a DBP documentation lawyer, Benjamin Pinpin, 43, to take his own life on Aug. 2, 2011. It also prompted a Senate inquiry into the matter.
In September 2012, Ombudsman Conchita Carpio Morales ordered the filing of criminal charges against 22 former DBP officers and executives and three private individuals for violation of Section 3(e) of the Anti-Graft and Corrupt Practices Act.
The charges against Benilda Tejada, Josephine Jaurique and Justice Lady Flores were dismissed for insufficient evidence.
Two months later, Morales ordered the dismissal from service of 13 DBP officials, saying they were administratively liable for grave misconduct and conduct prejudicial to the best interest of the service punishable by removal from the service. Inquirer Research
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