Bank execs to face trial

CEBU, Philippines - The Department of Justice has sustained an indictment it earlier issued against the officials of the former Rural Bank of Subangdaku (Cebu) Inc. on the string of criminal complaints filed by the Bangko Sentral ng Pilipinas after the bank was placed under receivership in 2009.

The DOJ denied all motions for reconsideration filed by the respondents; Lapu-Lapu City Mayor Paz C. Radaza, Francisco S. Gaisano, Peter S. Gaisano, Gloria Gaisano, Sonia U. Go, Divina H. Llamoso, Julius Eullaran, Marmelina Cuevas, Glenn Patrimonio, Aileen A. del Fierro, Rhuel Ayong, and Jufriel B. Argawanon.

According to the DOJ, the respondents failed to present new arguments to disturb the earlier findings of probable cause during preliminary investigation.

State prosecutor Amanda Felipe recommended that the respondents should be charged in court for violations of the DOSRI rules under section 36 of the Republic Act 8791 otherwise known as the General Banking Law of 2000 in relation to Section 36 of Republic Act No. 7653 or the New Central Bank Act.

Cuevas will be charged for violation of Section 55.2 (b) of RA 9891 in relation to Section 36 of R.A. 7653.

Radaza, Francisco and Gloria Gaisano, Go, Llamoso, Eullaran, Patrimonio, del Fierro, Ayong, and Argawaon were also indicted for  violation of Section 55.1 (a) of R.A. 8791 in relation to Section 36 of R.A. 7653 and falsification of commercial documents punishable under Article 172 in relation to Article 171 of the Revised Penal Code.

Felipe’s recommendation was approved by prosecutor general Claro A. Arellano.

The RBSI declared a bank holiday in 2009 and was subsequently placed under receivership of the Philippine Deposit Insurance Corp. pursuant to section 30 of the New Central Bank Act.

The Monetary Board of the BSP issued Resolution No. 14 dated January 8, 2009 prohibiting RBSI-Cebu from doing business in the Philippines and placing all its six branches under PDIC receivership.

The RBSI branches were located in Las Piñas, Dumaguete City, Lapu-Lapu City, Talisay City, Digos City and General Santos City.

Radaza was the bank president when it was placed under PDIC receivership.

The PDIC, the statutory receiver of the said closed bank, has likewise filed a criminal complaint against Radaza and Eullaran, a former bank loan officer, for alleged creation of fictitious loans and for conducting the banks’ business in an unsafe and unsound manner.

According to PDIC, Radaza and Eullaran conspired and caused the creation of 6,051 fictitious loans amounting to almost P2.6 billion from 2004-2008. About 97 percent of the loans were supposedly released by the RSBI-head office.

PDIC said that the respondents orchestrated the creation of official receipts and made it appear that payments were being made to the bank, when in fact, no payment had been received.

It added that results of the forensic investigation showed that 5,470 of the fictitious loans did not contain the required credit information and 581 of these loans did not have any supporting documents.

“Consequently, demand letters to the named borrowers of these loans were returned because of unknown addresses or because the borrowers did not exist,” the PDIC said. —/FPL (FREEMAN)