Bank of East Asia in Minglanilla: Another Legacybank on 'holiday'

CEBU - Another rural bank belonging to the Legacy Group declared a bank holiday yesterday, following the closure of seven other banks the other day.

The Bank of East Asia (Rural Bank of Minglanilla) posted a notice of bank holiday that caught even the security guards of the establishment unaware.

The Rural Bank of Carmen, Inc. in Carmen Cebu, which is also a part of the Legacy group, has remained open as of yesterday, but has not allowed depositors to withdraw more than P10,000.

The Freeman also noticed that there were no unusual withdrawals of funds from the said bank.

Reniel Buno, one of the three guards of the Bank of East Asia, said he was surprised yesterday when he learned that the bank was closed.

Posted in the bank’s roll-up door was a note from the management stating that BEA “declared a bank holiday effective December 10.” There was no further notice as to when the bank shall resume business.

Buno, of BA Investigation and Security Agency Inc., said there were at least 20 depositors, who came to the place to supposedly withdraw their savings.

Buno said since there was no order from their agency and from the bank itself, which they still have an existing contract, they will in their post.

Other banks under the Legacy Group that have declared bank holiday are the branches of Philippine Countryside Rural Banks, Inc. in the towns of Liloan and Consolacion and the cities of Lapu-Lapu, Mandaue and Cebu.

The PR Bank branch in Mandaue City and in the town of Argao also declared bank holiday the other day together with its branches in Negros, Tagbilaran and Dumaguete City.

The Freeman tried to contact officialsfrom Legacy Group at their offices in Quezon City and Makati City, but their phones just kept on ringing.

An agent of Legacy Group in their Cagayan de Oro branch said that it could be because the offices were already closed too.

The group, according to their website, is a conglomerate of banks and pre-need companies wherein the banks offer various financial and pre-need firms products like pension, education and memorial plans.

Other members of The Group are companies that provide credit cards, micro-lending and automotive financing services.

The rural banks under the Legacy Group were earlier found by the examiners of the Bangko Sentral ng Pilipinas last June 2007 to have an aggregate capital deficiency of P2.5 billion, prompting the latter to put the said banks under receivership, an action that was strongly opposed by the bank’s management.

A legal battle ensued and finally the Supreme Court handed a ruling last November 24, to allow the BSP findings to be enforced, which in effect declared the ten rural banks of Legacy Group to be closed due to insufficiency of funds.

As of last night, there is no official word from the BSP Central Office as to the declaration of bank holidays in Cebu and other parts of the country.

But an official from BSP public affairs office said that they were still having a meeting on this issue and may come up with an official statement today.

Part of the Legacy Group, is the Legacy Consolidated Plans Inc., which was acquired by Celso G. de los Angeles in 1997.

It ranked among the top ten pre-need companies in the country that offers pension, education and memorial plans.

De los Angeles used to be the chief of National Home Mortgage Finance Corporation, who was then accused in a 2003 buyout to have allegedly pocketed P70 million of the proceeds earned from the sale of PCRB.

According to reports, de los Angeles, now a town mayor in Bicol, in the mid-1980s was banned from banking because of the alleged collapse of three financial institution under his leadership.

Also yesterday, an insurance agent, who refused to be named, said that they will sue the bank for fraud if it will turn out that the time deposit issued by the bank is not duly registered with BSP.

But in the meantime, they still have to wait for the findings of the BSP.

In a closed door meeting held the other day active insurance agents, and big depositors of the bank, said that that share holders of Legacy Group have to re-open the bank or provide assurance to the depositors and insurance investors, otherwise they have to file a formal complaint against the owners.

Legacy offered very attractive investment products, such as “double-your-money” promotion, which lured mostly retirees to invest their retirement money on the product, while it promised higher yields, compared to other investment instruments, available in the market. — with reports from Liv G. Campo,Ehda M. Dagooc and Pepe Sollano/NLQ (THE FREEMAN)