‘There’s no witch-hunt at DBP, loans anomalous’

A private lawyer hired by Development Bank of the Philippines (DBP) to represent it in its case against businessman Roberto Ongpin on Wednesday denied that the bank was engaged in a “witch-hunt” against perceived friends of the previous administration.

Zenaida Ongkiko-Acorda was reacting to Ongpin’s statement on Tuesday that the current DBP board of directors was engaged in a witch-hunt that drove a DBP lawyer, Benjamin Pinpin, to take his own life on Aug. 2.

Acorda, of the Ongkiko Manhit Custodio & Acorda law offices, said the DBP loans totaling P660 million extended to Ongpin, the former Marcos trade minister, were “anomalous.”

“DBP’s internal auditors also reported the anomalous loan and sale transactions involving Deltaventure Resources Inc.,” she said at a press conference at the law firm’s Makati City office. “The Commission on Audit confirmed the internal auditor’s findings.”

Acorda said it was “an enigma that a puny company such as Deltaventure, with a paid-up capital of only P625,000 and with reported losses of P98 million, was able to obtain gargantuan loans from DBP in the amount of P150 million and P510 million with extraordinary speed.”

Approved in a day

Acorda noted that the loan was approved by the bank’s risk management committee, executive credit committee and its board of directors in a single day.

“This company was able to obtain a waiver from DBP of no less than 10 borrowing requirements which resulted in violations of several banking laws and DBP rules, and exposed the bank to high-lending risks and the possibility of default,” she added.

The loan—granted in late 2009—formed part of Ongpin’s P2-billion acquisition of Philex Mining Corp. shares, which he then sold to business tycoon Manuel V. Pangilinan.

DBP charged Ongpin market-level interest rates, earning P4 million in the process and was repaid fully ahead of schedule.

Ongpin also bought 50 million Philex shares from DBP, allowing the bank to book P1.3 billion in profits.

He said his companies bought the shares at P12.75 per share on Nov. 9, 2009, higher than the P9-to-P11 price range before the transaction.

On the day of the transaction, Philex closed at P11.78, lower than the selling price of DBP to Deltaventure, according to Ongpin.

“So, clearly, [then DBP president Reynaldo] David made a sound decision to dispose of part of his Philex holdings at P12.75,” the businessman said in a full-page ad in the Inquirer on Aug. 9.

Ongpin said “Mr. David certainly cannot foretell future stock price movements. For the information of the DBP lawyers, only God can do that.”

Exposed to sanctions

Acorda pointed out, however, that the bank could have earned P412 million more had it sold its Philex shares to Pangilinan directly at a higher price.

She added that the transaction exposed DBP to sanctions from the Bangko Sentral ng Pilipinas, which wrote the bank on April 11, asking about the transaction.

Acorda, who also identified herself as the DBP spokesperson, disputed Ongpin’s assertion that Deltaventure had over P1 billion in equity when the transaction occurred.

“Nowhere did it appear in any of the supporting documents submitted by Deltaventure that it had over P1 billion in stockholders’ equity,” she said.

Acorda noted that the loan was collateralized at a ratio of only 1.25:1, short of the required 2:1 collateral coverage.

She added that Ongpin was allowed to withdraw the collateral of P510 million “without security or collateral whatsoever during the period that the original collateral was withdrawn.”

The collateral to the DBP loans included P1.1 billion worth of shares in his publicly listed gaming firm, Philweb Corp., and P610 million worth of shares in Philex, according to Ongpin.

Ongpin, two other private individuals, and 25 past and current DBP officers were charged on Aug. 5 with graft and violation of banking laws in the Office of the Ombudsman.