Unitrust Bank placed under receivership

Unitrust Development Corp., a thrift bank reportedly owned by the group of Japanese businessman Genta Ogami, declared a bank holiday yesterday and was immediately placed under receivership by the Philippine Deposit Insurance Corp. (PDIC).

The 12-branch thrift bank is the first bank to fold up this year.

Ogami is the owner of G. Cosmos Philippines which was ordered by the Securities and Exchange Commission (SEC) to close after it engaged in the sale of unregistered investment contracts.

PDIC president and chief executive officer Norberto C. Nazareno said PDIC representatives are currently conducting "control verification" and examination of bank deposits and other records of the bank, including inventory of bank assets in preparation for the servicing of claims for insured deposits."

Nazareno added the examination will be fasttracked to service claims for insured deposits at the soonest possible time.

Unitrust informed the Bangko Sentral ng Pilipinas (BSP) that it has been experiencing heavy withdrawals in the past two weeks, with about P100 million already withdrawn by depositors apparently wary of the new management taking over the bank.

BSP Governor Rafael B. Buenaventura assured the public that the closure of Unitrust will not make a major impact in the banking sector.

"We are ruling out any systemic threat as a result of the bank’s voluntary closure. Unitrust is too small a bank to have an economic impact," Buenaventura said.

PDIC data shows Unitrust has total assets of P700 million, which Nazareno said, is not even less than half of one percent of the industry’s total assets of P3.257 billion. It has estimated deposit liabilities of P284 million and more than 18,000 accounts.

Buenaventura said the BSP is studying options "to see what can be done to protect depositors," whose money were trapped.

As a result of the heavy withdrawals, Banco de Oro also reportedly decided to stop its check clearing arrangement with Unitrust.

"It can no longer meet withdrawals. The withdrawals were very heavy during the Christmas holidays," said BSP Deputy Governor Alberto V. Reyes.

Reyes said the BSP could not yet ascertain the total amount of deposits that remained with the bank at the time of its closure but said latest reports show deposits of more than P400 million.

It has also not known how much of the bank’s deposits are insured with the state-run PDIC.

Reyes said records show Unitrust was already undercapitalized by P160 million when it closed.

But Buenaventura said Unitrust’s situation is not unique, adding depositors’ withdrawals were largely a result of their fears about the new owner of the bank, who reportedly has several pending cases.

Buenaventura said Ogami cannot be subject of an extradition process because he never appeared as beneficial owner of the bank nor in any business that owned it.

"As far as our records are concerned, he does not appear as owner but we will look into it," he said.

The PDIC will determine within 90 days whether to permanently close Unitrust and proceed with a liquidation of its assets or try to save the bank through a rehabilitation program.

Before Ogami’s group reportedly assumed ownership of the bank, Unitrust was controlled and owned by former PSE president Jose Luis Yulo Jr., former Congressman Emigdio Tanjuatco, the Group Management Insurance of the Philippine Islands, Agapito Thelmo and Benthel Development and Private Holdings Management Corp.

G. Universal Co. Ltd., Novaniti Saiken Koishu Co. Ltd. along with Leopoldo Valcarsel, Pedro Montanez and Franciso Yuseco hold an equal 20-percent interest in the bank.

These holdings allowed the Ogami Group to skirt a BSP rule requiring prior BSP approval of the change in bank ownership.

"Since Ogami’s acquisition was only 20 percent, this did not require the prior approval of the BSP," Buenaventura explained.

Last October, the BSP issued a cease and desist order against Unitrust, directing the bank to discontinue its newspaper advertisements as the BSP launched an investigation into its acquisition by the group of Ogami.

The move was prompted by reports that Ogami had acquired 20 percent of Unitrust through one of his holding firms, G. Universal Co. Ltd which led the group of investors that purchased the remaining 80 percent of the bank.

Unitrust then went into an aggressive hiring binge, posting several newspaper advertisements that outlined the bank’s new thrust as well as its increased manpower requirement to support its expanded operations.