House body to probe UOBP deal

The House committee on banks will open an inquiry this week into the alleged control by Singaporean investors of the United Overseas Bank of the Philippines (UOBP).

Rep. Jaime Lopez (Lakas, Manila), committee chairman, said yesterday his panel would want to inquire into whether Singaporeans have indeed gained control of the local bank.

He said the committee would also check if constitutional limitations on foreign ownership of a domestic corporation and the General Banking Act have been violated.

UOBP was formerly Westmont Bank with the group of former Finance Secretary Edgardo Espiritu holding the controlling 33-percent interest.

The inquiry by the Lopez committee was prompted by Resolution 813 filed by party-list Rep. Emmanuel Joel Villanueva.

Villanueva said he received reliable information that the group of Espiritu is selling out to Singaporean investors in UOBP.

"If the deal pushes through, the Singaporeans will have full and absolute control of the United Overseas Bank, which would be a violation of the 40-percent constitutional limit on foreign ownership of a Filipino corporation," he said.

"The deal should be aborted not only because it would violate the Constitution, but also because small investors lumped with the Espiritu group do not want to sell their shares," he added.

The hearing committee will summon officials of the Bangko Sentral ng Pilipinas and UOBP to its inquiry.

Also to be invited are Espiritu and representatives of the small shareholders.

UOBP says 2 groups should resolve differences

Meanwhile, the Farmix Group and the Espiritu Group should settle their differences and not drag the UOBP nor the Bangko Sentral ng Pilipinas into their private dispute, UOBP said yesterday.

In a statement, UOBP confirmed it had bought the 33-percent interest of the Espiritu Group in the bank, giving it almost 100-percent ownership which is now allowed by law. Farmix still has 258 shares equivalent to less than one percent of the bank’s 35,200,000 shares outstanding.

Farmix had said it had been "deliberately excluded" from the negotiations between UOBP and the Espiritu group. But UOBP said this was because Farmix had served notice that it had withdrawn from the Espiritu group. Having received such notice, UOBP could not have included Farmix in its settlement negotiations with the Espiritu group.

UOBP then negotiated only with the Espiritu group and decided to separately address Farmix’s position.