PDIC sees record Legacy payout of P14 billion

MANILA, Philippines - The Philippine Deposit Insurance Corp. (PDIC) expects its total pay-out to depositors of the failed Legacy Group to reach a record P14 billion, the largest pay-out case in its history.

The Legacy investment scam, which involves 12 rural banks, four pre-need companies, three realty companies, one motor vehicle firm, and several holding companies, would wipe out nearly a fourth of PDIC’s existing deposit insurance fund (DIF) of P70 billion.

“It is the most complex, sophisticated, well-concealed and extremely challenging case the PDIC has ever handled. It is a mess that we are trying to unseal,” Jose C. Nograles, PDIC president, said in a press briefing yesterday.

Nograles said they have in their possession more than 2,000 boxes of documents coming from the various establishments covered by the investigation, occupying several floors of the PDIC building.

By October this year, the PDIC will start issuing checks for deposit accounts potentially reaching P10.4 billion. With the same timetable, the government insurance agency will also issue all the letters informing depositors of denied claims, claims that still need additional documents, claims that were denied, and claims that have been referred to the legal division.

The PDIC for the first time slapped a syndicated estafa case, not against an individual, but on 20 individuals led by Legacy owner Celso de los Angeles, his wife and son, and officers of Legacy-owned banks and companies.

Nograles likewise said they are also looking at the extent of liabilities or level of negligence of the external auditors of the 12 Legacy-related banks. “We are also investigating whether they have accreditation from the Bangko Sentral ng Pilipinas,” the PDIC chief executive added.

Meanwhile, PDIC executive vice president Imelda S. Singzon reported that the 12 Legacy-affiliated banks have overstated their assets by P18.96 billion.