Sequestered bank asked to drop coco levy cases

The government-sequestered United Coconut Planters Bank (UCPB) should drop its case against the government and recall its engagement of the law firm of its government-appointed director to pursue the suit.

Lawyer Oliver San Antonio, National Coalition of Filipino Consumers (NCFC) spokesperson, describe as “palusot” (cop-out) the bank’s denial of impropriety in the hiring of the law firm of its director, lawyer Nilo Divina, to file a petition for declaratory relief before the Supreme Court.

On Tuesday, UCPB in a statement described as “recklessly baseless” the accusations against Divina.

UCPB said the supposed issue of conflict of interest against Divina was “simply not true,” adding that the bank’s corporate governance committee “had already looked into possible governance issues and subsequently determined that the requisites to satisfy any conflict of interest challenge were more than adequately satisfied.”

The bank had asked the Supreme Court to uphold the UCPB’s ownership of an 11-percent stake in Coconut Industry Investment Fund (CIIF) Oil Mills Group, which is composed of holding companies that used coco levy funds to buy shares in San Miguel Corp.

UCPB and Coconut Planters Life Assurance Corp. (Cocolife) are seeking to recover direct investments in CIIF, worth about P15.6 billion, to revitalize the bank.

San Antonio said that while the NCFC, which a UCPB director branded  fake, welcomed efforts of UCPB to air its side, “its statements did little to dispel suspicions of impropriety and misconduct on the part of the UCPB board.”

“They neglect to mention that the government owns only a 72-percent stake in UCPB,” San Antonio said. “If the money transfers from one pocket to another, our farmers lose 28 percent of the money going into the other pocket,” he said.

NCFC said UCPB had admitted it knew of the potential conflict of interest in giving the case to the law firm of Divina when it referred the matter to the bank’s corporate governance committee.

“What they did not bother to explain is the basis for the committee decision (to give the case to Divina’s law firm),”  NCFC said.