Pichay, Gatchalian arraignment reset

The arraignment of Reps. Prospero Pichay Jr., and Wesley Gatchalian has been reset to Jan. 17 pending their appeals of the Sandiganbayan’s decision to proceed with their trial for graft.

The antigraft court’s Fourth Division last month sustained the Ombudsman’s finding of probable cause for the charges of graft and violation of banking rules against the two congressmen, but dismissed related malversation cases.

The prosecution said the government suffered “undue injury” when P780 million in funds of the Local Water Utilities Administration (LWUA) were misused to purchase a 60 percent stake in Laguna-based Express Savings Bank Inc. (ESBI). The bank is jointly owned by Forum Pacific, Inc. (FPI), and the Gatchalian family’s WELLEX Group, Inc. (WGI). Pichay headed LWUA when it bought the shares in 2009.

In its 53-page resolution on Oct. 18, the Fourth Division dismissed malversation charges because prosecutors failed to implead an “accountable officer” who can be held liable for the misused funds.

It also junked charges of violation of the General Banking Act, saying LWUA officials are allowed to sit as ESBI officers because it has become a subsidiary of a government corporation and no longer a private bank after a majority of its shares was acquired by the government agency.

The court decided, however, to proceed to try the two congressmen because they had raised arguments pertaining to evidence “best threshed out in a trial.”

Also facing graft are Gatchalian’s brother, Kenneth, and parents William and Dee Hua Gatchalian; former LWUA officials Wilfredo Feleo, Jr., and Enrique Senen Montilla III; WGI executive Yolanda dela Cruz; FPI executives Arthur Ponsaran, Geronimo Velasco, Jr., Peter Salud, Rogelio Garcia, Lamberto Mercado, Jr., Evelyn dela Rosa, Joaquin Obieta, and Elvira Ting; and ESBI corporate officers George Sia Chua, Gregorio Ipong, Wilfred Billena Generoso Tulagan, and Edita Bueno.

Pichay, Feleo and Montilla also are to be tried for violating the Manual of Regulation for Banks because LWUA acquired ESBI’s stocks without prior approval of the Monetary Board of the Bangko Sentral ng Pilipinas. The private defendants, including the Gatchalians, were cleared of the charge because the indictment did not question their companies’ actions.

Among the Gatchalians, only Sen. Sherwin Gatchalian had been cleared of all the charges of malversation, graft and violation of MORB against him.