8 defendants barred from PCGG’s Domsat case trial

MANILA, Philippines — The Sandiganbayan has barred eight defendants from participating in the trial of a civil case filed by the Presidential Commission on Good Government (PCGG) to recover the government’s majority shares in Domestic Satellite Philippines Inc. (Domsat), which were allegedly illegally obtained by a private company through a supposedly disadvantageous contract entered into by the cronies of the late dictator Ferdinand Marcos.

In an 11-page resolution promulgated on May 30, the anti-graft court’s Second Division has granted the petition of the PCGG, represented in court by the Office of the Solicitor General (OSG), to declare the eight defendants in default, which means they can no longer file any pleadings, present their counter-evidence and participate in the proceedings.

“A defendant declared in default loses his or her standing in court. He or she is deprived of the right to take part in the trial and forfeits his or her rights as a party litigant, has no right to present evidence supporting his or her allegations, and has no right to control the proceedings or cross-examine witnesses,” the Second Division said.

“Moreover, he or she has no right to expect that the court would act upon his or her pleadings or that he or she may oppose motions filed against him or her,” it added.

Declared as defendants “in default” were Investa Corp., Rosol International Inc., MLI Realty and Development Inc., Ignacio Debuque Jr., Rodrigo Silverio, Cenon Cervantes Jr., Luz Yap and Leonardo Godinez.

The Second Division noted that of the 10 defendants in the PCGG’s civil suit, only two – Nilo Peña and the estate of Pompeyo Nolasco – filed their answers even if all of the defendants were considered served with summons, either through personal service or through the publication of the summons in a newspaper of general circulation.

It said the eight defendants were given an ample time of 60 days since the serving of summons to file their respective answers, but nothing was submitted to date. It clarified, though, that the eight still have the right to receive notices of the proceedings and that the PCGG must still present evidence to support its allegations.

“(The) Court is to proceed with trying the case based on the respective answers filed by defendants Peña and Estate of Nolasco, and decide the case based on the evidence to be presented,” the court’s resolution read.

The ruling was penned by Associate Justice Arthur Malabaguio with the concurrence of Associate Justices Oscar Herrera Jr. and Michael Frederick Musngi.

Filed by the PCGG on March 3, 1998 the petition, docketed as Civil Case No. 0182, seeks to nullify the management contract between Domsat and Investa Corp. approved by Marcos Sr.’s alleged cronies, Roberto Benedicto, Jose Africa and Manuel Nieto in 1989.

Benedicto, Africa and Nieto were then members of the new board of directors of Domsat as nominees of Marcos.

The PCGG said that the payment scheme to Investa, as stipulated in the contract, amounted to 10,000 shares worth P1 million per semester. It added that the contract effectively reduced the government’s stake in Domsat from more than 50 percent to just 16 percent as of 1998.