PDIC to proceed with bidding for Unitrust

The Philippine Deposit Insurance Corp. (PDIC) remains undaunted by a temporary restraining order (TRO) issued by a Makati Regional Trial Court stopping the sale of the controversial Unitrust Development Bank (Unitrust).

"We will go on (with the public bidding)," PDIC president Norberto C. Nazareno said over the weekend. "It (TRO) does not say we cannot hold a public bidding."

The PDIC already received an undisclosed number of bids last Aug. 15, and has scheduled a public bidding on Aug. 29.

Nazareno said they have the option to start liquidation proceedings in the event there is a failed bid or no one submits rehabilitation bids acceptable to the PDIC. "However, if there are still proposals we are still willing to listen," he added.

The Makati Regional Trial Court issued a temporary restraining order (TRO) stopping the PDIC from selling the assets as well as liquidating Unitrust Bank.

It also directed that the PDIC should not award or accept "the rehabilitation program of Philippine Bank of Communications (PBCom) without the requisite stockholders’ approval." The rehabilitation rule indicates that the winning bidder for the bank’s rehabilitation must get at least two-thirds consent of the bank’s depositors and stockholders before it is fully awarded by the PDIC.

Nazareno said the court order did not specifically state that PDIC should not hold a public auction for the bank’s rehabilitation.

"We have a mandate to fulfill. Our mandate states that we must try to save a bank or liquidate it if the need requires so. That is our mandate and that is what we are simply doing," Nazareno said.

On the issue of courts interfering with the bank’s rehabilitation, the PDIC president said that they would stick to their mandate.

"How can a regional trial court take over the mandate of the PDIC," said a high-ranking government official. "Will the nagging issue of the judicial system interfering on purely corporate affairs or affairs with a legal mandate raise its ugly head once more?"

A group of the bank’s stakeholders represented by Francis Yuseco threatened last Friday to file with the same regional trial court for a judicial rehabilitation order. A judicial rehabilitation order recognizes the petitioner’s (Yuseco, et. al.) rehabilitation program while stopping other entities such as the PDIC from rehabilitating or selling Unitrust Bank.

And should the courts issue a judicial rehabilitation order, the petitioners or the Yuseco group could take control of the bank since the courts will stop the PDIC or other government entities from selling or liquidating the bank.

Under the Yuseco group’s rehabilitation program, the court will appoint a receiver, which can also recommend by the petitioners. Among the names presented as receiver are: Flor Orendain, former chief executive of the National Home Mortgage Financing Corp.; Rene Jazmines of Manila Bank, and Mario Gutierrez of Rich Investments.

Unitrust is presently under receivership with the PDIC and the Monetary Board of the Bangko Sentral ng Pilipinas (BSP) is closely monitoring it.