In a press briefing, Bangko Sentral ng Pilipinas (BSP) Governor Rafael B. Buenaventura said they are trying to get the two contending parties to sit down and talk rather than throw charges and counter-charges against each other.
Buenaventura said the sooner they resolve the issue the better for the bank. Continued strife would likely result to a loss of depositors and other bank clients. The (posturings of both parties) are "counter-productive," he said.
The two contending parties are the majority owners of the bank represented by the United Overseas Bank Ltd. (UOBL) of Singapore and the minority group represented by the family of former Finance Secretary Edgardo Espiritu and Jolibee Food Corp. president Antonio Tan Caktiong.
The two contentious issues are: the $1.4-billion "payment" to be made by UOBL to the minority group; and the funding counterpart of the minority group for the bank’s rehabilitation.
UOBP was known as Westmont Bank before it was acquired by UOBL for $1.6 billion to get majority control of the bank. After infusing P3 billion as part of its rehabilitation funding, the Singaporeans agreed to use some P1.4-billion worth of uncollected loans or the so-called "political loans" of the bank as their payment for majority control.
The minority group agreed to the arrangement. However, the Philippine Deposit Insurance Corp. (PDIC) and the BSP threw the proposal out of the window stating that the Singaporeans could not use the loans as payment since they were not yet in control of the bank.
"Whatever they had agreed on regarding the political loans is something that they should settle outside," the BSP Governor said, adding that the monetary authorities will not recognize it as part of the bank rehabilitation.
Earlier, the Singaporeans wrote a letter to the BSP seeking the disqualification of four of its directors coming from the minority group "for trying to trigger a bank run."
In a letter to the BSP’s Monetary Board (MB), the UOBP sought to disqualify board directors Avelino Sebastian Jr., Alfonso Reyno Jr., Victor P. Lazatin and Ferdinand A. Domingo.
UOBP president and chief executive officer Chua Teng Hui said the four directors held a press conference recently "to agitate and cause panic among the depositing public and sabotage the bank."
Chua added that directors are placed at the helm of banks to look after the interest of the bank. "In gross violation of their duties, they gave gravely damaging and incorrect statements to the press if only to further the interests of the minority shareholders, even if it meant sabotaging the bank."
The minority group denied having issued such statements in a press conference.
The dispute between the two groups of stockholders was elevated to the Australian Commercial Dispute Center (ACDC) based in Sydney, Australia. However, the minority group was able to secure a court injunction with the Manila Regional Trial Court, which bars all involved parties to continue hearing the arbitration case with the ACDC. – Ted Torres