DOJ questioned for ‘dribbling’ case vs bank execs

MANILA, Philippines - A litigant has questioned the Department of Justice (DOJ) for allegedly “dribbling” its P240-million criminal complaint against executives of Standard Chartered Bank (SCB).

Philippine Investment Two Inc. (PI II), through their lawyers from the Divina Law firm, formally raised last July 5 “serious questions” with the office of Justice Secretary Leila de Lima regarding the transfer of their case against SCB officials three times to three different investigating prosecutors.

The investment firm charged SCB officials with violating Article 318 of the Revised Penal Code by reportedly deliberately withholding vital information from its rehabilitation proceedings before the Makati regional trial court. 

The firm also filed a perjury case with the Makati prosecutor’s office against SCB officials led by Mahendra Gursahani, Chun Wei Yeong, Kathrina Sebastian, and Karen Chin Geok Go for reportedly issuing false statements during the PI II’s rehabilitation proceedings before the court.

PI II, the former local unit of the defunct Lehman Brothers Holdings, Inc., accused the SCB officials of denying that the bank had $90 million in collaterals for the P819 million in loans it extended to PI II in 2007.

The firm also accused the SCB of hiding from the local rehabilitation court that it had received relief from Lehman Brothers for claims with the United States bankruptcy court for the same P819 million that it was seeking repayment for in the local rehabilitation court. The Lehman Brothers investment bank filed for bankruptcy in the US in 2008.

The discovery of the reported deceit led the local rehabilitation court to remove SCB from PI II’s management committee in 2011, the investment firm said. 

“The fraudulent concealment of material facts has caused, and continues to cause damages and prejudice to PI II considering that it was required to pay SCB, P240 million in principal and interest,” PI II said in its criminal complaint.

The investment firm said it is talking to banking regulators in New York, which had jurisdiction over some aspects of its case versus SCB.

“In December 2012, the New York banking regulators through the New York district attorney’s office fined SCB $327 million for illegal transactions committed by SCB that mirror SCB’s own transgressions against PI II in the Philippines,” PI II’s lawyers said.