2 ex-Urban Bank directors deny profiting from land deal

Two former directors of the defunct Urban Bank have denounced as “false and malicious” the allegations that they profited personally from a property deal that the bank had entered into in the mid-1990s.

In a letter to the Inquirer, Benjamin de Leon and Delfin Gonzalez said they were merely nominal directors who represented minority stockholders of Urban Bank when the latter bought the Pasay City property in question from the Isabela Sugar Co. Inc.

“The purchase of the property was handled by the management of Urban Bank. Our role in the sale was merely to consider it for approval when the bank management presented it to the board of directors for ratification,” they said in a joint letter.

De Leon and Gonzalez were accused by Isabela Sugar president Enrique Montilla of being part of a group within the bank which allegedly received some P73 million in kickbacks when the bank purchased the Pasay City land in 1994.

The 8,628-square meter property was sold by Isabela Sugar to Urban Bank in 1994 for P242 million.

Montilla’s allegations were based on a supplemental submission made by lawyer

Magdaleno Peña to the Supreme Court when the latter sought to reverse the high court’s decision dismissing his claim for P25 million in broker’s commissions for the land deal.

Peña was claiming a broker’s fee for supposedly clearing the property of tenants ahead of the transaction.

On Oct. 19, 2011, the Supreme Court junked Peña’s petition for a review of a Court of Appeals decision that ruled that the Regional Trial Court of Bago had gravely abused its discretion in awarding “unconscionable damages in favor of Peña against Urban Bank and its officers.”

“If there is any truth to the allegations against us, why did Peña wait for 16 years to submit to the Supreme Court the Montilla affidavit?” De Leon and Gonzaelz said.

“Why did Peña not submit the affidavit to the Court of Appeals that reversed the decision in his favor rendered by the Regional Trial Court of Bago City?” they said.

“It is obvious that the Montilla affidavit is a last-ditch effort by Peña to convince the court to reconsider its decision denying his claim for P25 million,” they said.

Other Urban Bank officials that Montilla accused of having allegedly profited from the deal were the late Teodoro Borlongan, who served as Urban Bank president, and former bank directors Eric Lee, Marilyn Ong, Art Manuel, Ben Lim and Corazon Bejasa.

Urban Bank was closed down in 2001 and acquired by the Export and Industry Bank (EIB). EIB was in turn ordered shut down by the central bank late last month after it suffered liquidity problems.