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Senator Gatchalian posts bail in bank buyout case

/ 05:33 PM July 15, 2016

Sen. Sherwin “Win” Gatchalian on Friday posted a P90,000 bail in his criminal case over the allegedly anomalous buyout of an insolvent bank by the Local Water Utilities Administration (LWUA) in 2009.

The newly elected senator took the opportunity to post his bail bond away from the glare of the cameras of the media who were diverted to covering the posting of bail and booking procedure of former Vice President Jejomar Binay, who was charged with malversation, graft and falsification of public documents for the anomalous construction of the P2.28 billion Makati City Hall car park building.

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Gatchalian paid P90,000 bail: P30,000 for one count of violation of Section 3(e) of Republic Act No. 3019 or the Anti-Graft and Corrupt Practices Act; P40,000 for one count of malversation of public funds as defined under Article 217 of the Revised Penal Code; and P20,000 for one count of violation of the manual of regulation for banks (MORB).

The neophyte senator was indicted as a former corporate executive of Wellex Group Inc. (WGI), which co-owned Express Savings Bank Inc., (Esbi), a local thrift bank based in Laguna owned by their family. Esbi was acquired by LWUA.

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READ: Gatchalian, Pichay face criminal raps over bank buyout

Former LWUA chair and Surigao del Sur Rep. Prospero Pichay Jr. was also charged with three counts of graft, three counts of malversation, one count of violation of MORB and one count of violation of Republic Act No. 8791 or the General Banking Law of 2000.

Other officials charged were former LWUA officials Eduardo Bangayan, Aurelio Puentevella, Enrique Senen Montilla III, Wilfredo Feleo, Daniel Landingin, and Arnaldo Espinas; Wellex Group Inc. executives led by its owner, so-called “Plastic King” William T. Gatchalian, wife Dee Hua Gatchalian, sons Senator Gatchalian, former Alay Buhay and now Valenzuela Rep. Weslie T. Gatchalian, and Kenneth Gatchalian, Elvira A. Ting, and Yolanda de la Cruz; FPI executives Weslie Gatchalian, Arthur R. Ponsaran, Geronimo Velasco Jr., Peter Salud, Rogelio D. Garcia, Lamberto Mercado Jr., Joaquin Obieta and Evelyn de la Rosa; and Esbi executives George Chua, Gregorio Ipong, Generoso Tulagan, Wilfred Billena, and Edita Bueno.

READ: Pichay, 5 Gatchalians sued

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.

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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

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.”/rga

READ: Winning senator Gatchalian indicted over anomalous bank deal

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TAGS: bail, buyout, Esbi, Express Savings Bank Inc., Local Water Utilities Administration, LWUA, Wellex Group Inc., Win Gatchalian
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