MANILA, Philippines—The state-controlled United Coconut Planters Bank should drop its case against the government and recall its engagement of the law firm of its government-appointed director to pursue the suit.
Lawyer Oliver San Antonio, National Coalition of Filipino Consumers spokesperson, described as “palusot” (cop out) the bank’s denials of impropriety in the hiring of the law firm of its director, lawyer Nilo Divina, to file a petition for declaratory relief before the Supreme Court.
The bank wanted the high court to declare the UCPB’s ownership of the 11-percent stake the bank had in the Coconut Industry Investment Fund Oil Mills Group, which are holding companies that used coco levy funds to buy shares in San Miguel Corp.
UCPB, along with the Coconut Planters Life Assurance Corp. (Cocolife), is seeking to recover direct investments, worth about P15.6 billion, to help revitalize the bank. UCPB said its investments were distinct and separate from the CIIF, which the bank had also handled, and which were the main component of the P70-billion coco levy fund that the Supreme Court earlier ruled was public fund..
The bank said that its investments, once recovered, would also benefit the state, UCPB, a sequestered company, being mostly owned by the government.
San Antonio said that while the NCFC welcomed efforts of the UCPB to air its side of the issue, “its statements did little to dispel suspicions of impropriety and misconduct on the part of the UCPB board.”
“UCPB explains that coconut farmers benefit from the cases filed by UCPB against PCGG because should the courts rule that UCPB owns the 11 percent of the interest of UCPB in SMC, this will also go to them, as shareholders of the bank; this is palusot (cop out) number one, as they neglect to mention that the government owns only a 72-percent stake in UCPB. If the money transfers from one pocket to another, our farmers lose 28 percent of the money going into the other pocket,” he said.
San Antonio also lashed against UCPB’s explanation in the hiring of UCPB director Nilo Divina’s law firm. The bank said the Divina’s engagement was cleared by the UCBP corporate governance committee and Divina waived his professional fees.
“This statement is a clear admission that the board knew it had potential conflict of interest issues, that is why they referred the matter to their own Corporate Governance Committee.” San Antonio said, adding, “Nowhere in their statements did they bother to explain the basis for the committee’s decision.”
If the committee had only been “more careful and circumspect,” San Antonio said, it would have known that the issue “was not only actual conflict of interest but the mere impression and high probability of conflict of interest.”
“UCPB board gave his law firm the cases despite knowing the ethics issues involved, and Divina accepted. The UCPB board should own up and be answerable to these transgressions. They should not try to explain with another cop out,” he said.
Divina, in a statement sent to the Philippine Daily Inquirer said he had requested the UCPB management to excuse his law firm, DivinaLaw, from continuing to handle the case “given the undeserved and unfair media treatment that I and our law firm have been getting.”
“However, Management has asked our firm to continue given our familiarity with the case and presumably because of their trust in our ability and competence as legal counsel. I will reiterate my request to allow our firm to withdraw as legal counsel for the bank this forth coming board meeting,” he said.
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