"We have a very solid case with all the necessary documents to prove charges of large-scale estafa against the UBI officials," said Juan de Zuñiga Jr., general counsel of the Bangko Sentral ng Pilipinas (BSP).
Last September, the BSP and the Philippine Deposit Insurance Corp. (PDIC) filed before state prosecutors a series of swindling charges against Urban Bank chairman Arsenio Bartolome III and president Teodoro Borlongan.
Also included in the original charge sheet were corporate secretary Corazon Bejasa, senior vice president Nida Santos, senior managers Milagros Santiago and Rowena Punsalan, managers Mark Ching and Chulla Formanes, Urbancorp Investments Inc. assistant vice president Loida Payonga and manager Amalia Ordas.
Zuñiga said their optimism was based on the fact that on April 26, the day UBI declared a voluntary bank holiday, some 188 employees of the PDIC were quickly able to seal vaults, padlock offices and take away keyboards from computers to keep files intact.
The act, he explained, was meant to thwart any attempt by bank officers or employees to sanitize or destroy vital documents.
While acknowledging that the PDIC team was merely doing its job, Borlongan had protested that the swift action didn’t give them enough time to settle the bank’s problems, which stemmed from a bank run that left them with only P125 million in the vault.
However, BSP and PDIC said they had to move fast "to prevent a repeat of previous bank failures that have resulted in records being lost."
Authorities claimed that UBI executives could have easily split P200,000 deposits and allowed favored depositors to collect from PDIC, which only insures deposits of P100,000 per individual.
The BSP and PDIC have sued Bartolome and the others in three cases now pending at the Department of Justice. These include Borlongan’s alleged pre-termination of a P5-million time deposit and two misappropriation cases involving P4.6 billion, which significantly contributed to the bank’s closure.
Probers from the BSP and PDIC said the respondents conspired to purchase "sub-standard and doubtful receivables" from the trust department of the investment house even if they knew very well that the bank had serious liquidity problems.
The BSP said the conversion of funds resulted in immense damage that upset the rights and interests of depositors, creditors and stockholders.
Monetary investigators revealed that Urbancorp Investment had resorted to "heavy inter-bank borrowings" from February to April just to enable the company to meet its precarious liquidity requirements.