NBI finds Gotesco liable for swindling

The National Bureau of Investigation (NBI) has found Gotesco Investments, Inc., owners of Ever Gotesco Grand Central, liable for swindling, malversation of public funds and violations of the Anti-Graft and Corrupt Practices Act in connection with the 1997 sale of the land where its shopping mall stands by the Caloocan City government.

In its final report, the NBI’s Anti-Graft Division said Gotesco employed deceit in acquiring title to and ownership of a 22,685-square meter prime lot along Rizal Avenue Ext. in Caloocan City in connivance with the then register of deeds of Caloocan.

"Gotesco wrested title over the property without actually paying the selling price of P182 million by falsely making it appear that such amount as well as the transfer fees and real property taxes due on the property had been paid through the judicial process of consignation," the report said.

The report pointed out that the actual price of the property, if public auction or bidding were held, could even reach more than P340 million as determined then by Commission on Audit (COA) Chairman Eufemio C. Domingo in his recommendation to former City Mayor Macario Asistio Jr. in 1991.

It said the consignation of the selling price in the Regional Trial Court, Branch 22, of Caloocan City by Gotesco was nothing but a legal maneuver to conceal the fact that no payments for the price as well as for the transfer fees and real property taxes were actually made. "There was no actual cashout of the part of Gotesco. The city did not receive any payment. The check payments were not cashed ... the deal was a swindle wherein the city clearly had been the victim."

The NBI said Gotesco’s president, Jose S. Go, and sister Elena S. Go, who both signed and issued the check payments to the RTC of Caloocan, together with Gotesco executive vice president Yolinda Balmes and lawyer Acerey Pacheco, "all concertedly and deceptively acted with evident bad faith in causing the cancellation of TCT No. 54327 (the property’s old title) in favor of Gotesco because they never had, in the first place, the intention to pay the price of the property and the related fees and taxes."

"They know all along the check payments for the selling price and transfer fees would not be presented to the drawee bank for encashment and when required by the court to replace them with cashier’s or manager’s checks they deliberately failed to do so on the flimsy reason that there was a need to quiet title over the property," the report stated.

As early as May 15, 1991, the COA disapproved the 1990 deed of absolute sale to Gotesco by Caloocan based on its auditors’ findings that the disposal of the property was not subjected to public auction or bidding and that the P6,000 per square meter was too low compared to COA’s appraisal of P16,592.04 per square meter.

On June 3, 1997, the COA, composed of Chairman Celso Gangan and Commissioners Sofronio B. Ursal and Raul C. Flores, reversed the disapproval of the 1990 deed of absolute sale that eventually led to the anomalous sale of the property to the Go family.

However, the NBI believed that the COA erred in belatedly reversing the disapproval. "There was no longer a 1990 deed of absolute sale that could have been considered in 1995-97. Since no timely appeal as provided by law was taken either by the city or Gotesco in 1991, the disapproval by Domingo in 1990 had long been final and executory as early as 1991," the NBI report stressed.

No less than incumbent Mayor Reynaldo Malonzo refused to go along with the transaction, vetoing an ordinance that adopted the decision of COA under Gangan. The non-cooperation of Malonzo was the reason why Gotesco filed a complaint for consignation of the selling price with the RTC of Caloocan. The corresponding certifications by the clerk of court on the check payments by the Gos prompted the Caloocan register of deeds, Yolanda Alfonso, to cancel the old title and issue a new one to Gotesco.

But the NBI said Alfonso made the transfer of title to Gotesco in spite of the notice from Malonzo not to register such transfer.

"The consignation was farce from the very beginning. Gotesco mocked the judicial process of consignation by utilizing it as a means of defrauding the city of Caloocan. Gotesco availed of this legal proceeding to conceal the fact of non-payment of the purported consideration for the sale. Its complaint of consignation filed in the court was thus a mere ploy," the NBI report said.

It added that the city government of Caloocan lost more than P192 million as a result of the fraudulent transaction.