The Bangko Sentral ng Pilipinas (BSP) has uncovered some DOSRI (directors, officers, stockholders and related interests) violations against officers and directors of defunct Urban Banking Corp.
Informed sources from the BSP said the monetary authorities have apparently discovered that Urban Bank founder and chairman Arsenio Bartolome III and president Teodoro Borlongan, among others, have exceeded the 15-percent prescribed DOSRI limit imposed by the BSP.
Under BSP rules, a bank is prohibited from issuing DOSRI loans amounting to more than its capital funds or beyond 15 percent of its total loan portfolio, whichever is higher.
According to sources, the loans granted to the officers were apparently used to rescue Urban Bank's bleeding subsidiary, Urbancorp Investment Inc.
Urbancorp suffered from financial difficulty after some of its investors pulled out their investments in the company.
Sources said these DOSRI loans might have aggravated the liquidity problem being faced by Urban Bank that had started when it announced its plan to convert into a thrift bank. The announcement led to enormous withdrawals of deposits leading to a bank run that eventually resulted to closure of the bank.
BSP sources said the Monetary Board, the policy making body of the BSP, has turned over its findings to the Department of Justice (DOJ) for filing of possible charges against these officials.
"The DOJ is sifting (the BSP findings) to decide what case it would file against Bartolome and Borlongan, at least whether it would be civil or criminal. The BSP is leaving it to the DOJ," the sources said.
In an earlier press conference, Bartolome and Borlongan denied they have DOSRI loan problems.
BSP sources said any official of Urban Bank who will be found guilty of banking malpractice would definitely be "banned" from the industry.
"Bartolome and Borlongan could no longer be bank officials. I don't think they could be (bank) stockholders also and definitely, they will not receive any single centavo when Urban Bank is already fully rehabilitated. The rehabilitation (program) does not exonerate them from the (possible legal) cases," the sources said.
The STAR tried to get the side of the Urban Bank officials but failed.
As this developed, BSP Gov. Rafael Buenaventura said yesterday the Philippine Deposit and Insurance Corp., the receiver of Urban Bank, has yet to identify the final buyer of Urban.
As of now, those investors that have indicated interest in buying Urban include: Rizal Commercial Banking Corp., Allied Banking Corp., Keppel Tattle Bank of Singapore, and the Banque National de Paris.
The other day, it was reported the Urban Bank shareholders have signed a memorandum of agreement with Bank of Commerce for a possible buyout of the assets of Urban Bank.
Urban Bank's largest corporate depositors/investors include: Social Security System which owns 15 percent of the bank; Petron Corp., San Miguel Corp., and Manila Electric. Co. --