Rehabilitation of EIB hits major roadblock

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01:41 AM December 20th, 2012

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By: Michelle V. Remo, December 20th, 2012 01:41 AM

The rehabilitation of Export and Industry Bank has hit a snag as less than half of the depositors and creditors have consented to the planned sale of the troubled bank, according to the Philippine Deposit Insurance Corp.

The bank’s stockholders recently reiterated their requirement for PDIC to get the consent of all depositors and creditors before they give their own blessing to the sale.

In a statement, PDIC executive vice president Cristina Orbeta said that according to the latest records, only 44 percent of the bank’s depositors and creditors have given their consent to the sale.

This is despite the fact that the deadline for submission of the consent forms had been extended for two months from the original deadline of Sept. 8.

Even with the deadline extension, she said, the majority of the depositors and creditors have not given their consent.

Consent to the rehabilitation of EIB would mean a waiver of secrecy of deposits, among other requirements.

“The major stockholders raised the need for consent from 100 percent of the creditors and depositors with uninsured deposits before they can undertake to perform the acts required to approve and implement the rehabilitation of EIB,” PDIC said.

According to PDIC, it has exerted efforts to get the consent of all depositors and creditors through notices.

PDIC likewise said its officials had conducted meetings with uninsured depositors of EIB to explain the benefits of rehabilitating the bank.

Orbeta earlier said rehabilitating the bank would improve the chances for the uninsured depositors to get their money.

Under the law, only deposit accounts worth a maximum of P500,000 are covered by insurance.

Uninsured depositors may or may not be paid depending on the amount to be raised by PDIC from the sale of the assets of the failed bank.

PDIC had scheduled a bidding for EIB on Oct. 18, but the bidding failed as no potential investor appeared.

The absence of bidders was blamed on the three-day temporary restraining order issued by the Makati Regional Trial Court on Oct. 17.

The TRO was requested by parties that said they had claims against the bank.

These were Forum Holdings Corp., Pacific Rehouse Corp., East Asia Oil Co. Inc., Pacific Concorde Corp. and Mizpah Holdings Inc.

The five parties alleged that EIB Securities, a subsidiary of the bank, had sold DMCI shares without their consent, and that the sale led to their losses.

They want EIB to pay for their losses, and raised concern that the sale of the bank’s assets would adversely affect their claims.

Although the TRO had lapsed and was not extended by the court, the stockholders of EIB had said they also wanted the issue to be fully addressed first before they give their consent to the sale of the bank.

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