MB okays Espiritu group’s sellout to UOB Singapore

The Monetary Board has approved the buy-in of the United Overseas Bank of Singapore into UOB of the Philippines, sealing the transaction that would give the Singaporean group 100-percent interest in the bank.

Bangko Sentral ng Pilipinas (BSP) Governor Rafael Buenaventura told reporters that the board has flashed the green light for a group of Filipino shareholders led by former finance secretary Edgardo Espiritu to sell their interests to the Singaporean group for an undisclosed amount.

Buenaventura’s statement came on the heels of statements made by the local shareholders of UOBP that the parties have not reached an amicable settlement of the ongoing dispute between Espiritu and the Singaporean group.

Espiritu is claiming P1.4 billion in exchange for yielding majority control of the bank and it was reported that Espiritu and other Filipino shareholders of UOBP have agreed to sell out to the bank’s Singaporean owners, finally ending the dispute that culminated in the closure of the bank.

Sources said that UOBP’s Singaporean owners have agreed to shell out an undisclosed amount to buy out the Filipino shareholders who still own 33 percent of the bank.

At the end of the sale, the Singaporean owners would end up owning 100 percent of UOBP, formerly known as Westmont Bank.

UOBP has been locked in the dispute and the Singaporeans ended up running to the Bangko Sentral ng Pilipinas (BSP). The group wanted the central bank to intervene and sanction the Filipino group for reportedly attempting to run the bank to the ground.

The Singaporean owners alleged that the Filipino group tried to trigger a bank run by exposing the bank’s dirty laundry. The Sinagporeans also involved the Australian court and sued for arbitration.

However, the Filipino group managed to block the proceedings in the Australian court by securing a temporary restraining order from a Manila court, prompting the BSP to order the parties to settle the dispute between themselves.

According to Atty. Avelino Sebastian Jr., one of the Filipino officers of the bank, the settlement involved "a sum of money, the amount of which I do not know." Sources said the amount was less than P1 billion.

In 1999 when the bank was still known as Westmont Bank, the Singaporean group agreed to buy a 60-percent stake from Espiritu and other Filipino shareholders.

The acquisition entitled the Singaporean group to perks with the Philippine Deposit Insurance Corp. (PDIC) during the time when the bank was having problems.

The Singaporeans, backed by their mother company, the United Overseas Bank Ltd. of Singapore, has offered to buy out the Filipino investors as part of the overall settlement.

The offer was meant to ultimately put to rest the cases lodged by the local shareholders, mainly composed of a group led by Tony Tan Caktiong of the Jollibee fastfood chain, and the Espiritu group led by John Espiritu, son of the former cabinet secretary.

Together, the Tan-Espiritu group holds 171 million shares.

The Singaporeans will drop its petition for compulsory arbitration filed against Tan in Australia for not fulfilling his obligation under the investor agreement.

For their part, the local shareholders, along with other former officials of Westmont Bank, the progenitor of UOBP, will drop all cases they lodged against hte Singaporeans. – Des Ferriols