Shareholders move to stop EIB liquidation

The majority shareholders of Export and Industry Bank (EIB) have gone to court in an attempt to stop the bank’s liquidation, alleging “indecent haste” and “grave abuse of discretion” by banking regulators in ordering the bank’s dissolution.

In a 28-page petition filed in the Court of Appeals on April 26, the majority stockholders sought a temporary restraint order enjoining the Bangko Sentral ng Pilipinas and Philippine Deposit Insurance Corp. from taking any action with respect to the order to liquidate EIB.

The appellate court was likewise asked to issue a writ of preliminary injunction against the BSP and PDIC and to reverse and set aside any order, issuance and action pertaining to the liquidation of EIB or the conversion or disposal of any of its properties, based on a copy of the petition obtained by Inquirer.

Filed through legal counsel Zamora Poblador Vasquez & Bretana, the petition was a “special civil action for certiorari” signed by the following investors: Apex Bancrights Holdings Inc., Lead Bancfund Holdings Inc., Asia Wide Refreshments Corp., Medco Asia Investment Corp., Alfredo Yao, Zest-O Corp., Harmony Bancshares Holdings Inc. and Excalibur Holdings Inc. These investors control about 50.07 percent of EIB’s outstanding stocks.

The shareholders, in the petition, alleged that PDIC had imposed “unreasonable and oppressive” conditions that delayed or frustrated the transaction between EIB and Banco de Oro Unibank, which earlier agreed to be its white knight.

Among those that PDIC had “erroneously” considered as contingent liabilities of EIB, according to the petition, was the Pacific Rehouse case to which EIB was not a party.

The investors also alleged that PDIC had “frustrated” the efforts of EIB to increase its liquidity by selling its MRT bonds to a private third party.

PDIC was requested to sell MRT bonds to third party investors to unlock more funds for the bank but the petitioners said the regulator had denied the request, requiring EIB instead to sell them only to government-owned Development Bank of the Philippines and Landbank of the Philippines. The two state-owned banks, however, were not interested.

PDIC eventually approved the proposed sale of MRT bonds to third party investors but the approval came in too late because the buyers were no longer interested, the petitioners said.

For instance, it noted that PDIC had required consent from all creditors and uninsured depositors, even as PDIC itself had acknowledged that 15 percent of depositors could no longer be located because of incomplete and outdated addresses and contact details.