The once-prominent Go family of Ever Gotesco fame has suffered another financial blow after the seizure of its assets by regulators—to cover unpaid loans—was allowed by the Supreme Court.
Billions of pesos in emergency loans were extended by the Bangko Sentral ng Pilipinas (BSP) to save Go-led Orient Commercial Banking Corp. (OCBC) from collapse in the late 1990s.
The bank was eventually ordered closed in 1998 by the BSP amid findings of mismanagement.
In particular, BSP investigations found the bank had illegally lent money to its owners.
Following OCBC’s failure to make payments, the BSP seized several Go family assets, including the 60-hectare Ever Crest Golf Club and Resort in Batangas.
The BSP’s move, which was opposed by the Go family, was upheld by the Supreme Court this month.
“Petitioners were the ones who offered the properties of Ever Crest to BSP, and who had also assured that all the legalities and formalities for that purpose had been obtained,” the BSP said in a statement.
“They should not now be allowed to escape or to evade their responsibilities under the compromise agreement just to prevent the levy on execution of Ever Crest’s properties,” the statement read.
The Supreme Court decision, penned by Justice Lucas Bersamin, was dated July 8 but published this month.
In 2003, BSP and the Gotesco group signed a compromise deal to allow the latter to repay emergency loans OCBC received from regulators.
Under terms of this deal, the Gotesco group committed to pay its obligations amounting to P2.97 billion within 10 years, extendable for another five.
The golf course and other assets were put up as collateral.
But Gotesco failed to meet payments, prompting the central bank to file a motion for execution, allowing regulators to seize Gotesco assets.
The high tribunal’s latest ruling affirms “the challenged decision of the Court of Appeals upholding the Regional Trial Court’s (RTC) decision allowing BSP to levy on execution the properties indicated in the parties’ court-approved compromise agreement,” the BSP said.
Other parties in the case, apart from OCBC and its owner Jose C. Go, were Gotesco Properties, Inc., Go Tong Electrical Supply, Inc., Ever Emporium, Inc., Ever Gotesco Resources and Holdings, Inc., Gotesco Tyan Ming Development, Inc., Evercrest Cebu Golf Club, Nasugbu Resorts, Inc., GMCC United Development Corporation and Gulod Resort, Inc.
All firms are also owned by Go.
This was not the first time the Supreme Court sustained the validity of the compromise agreement.
In a Resolution dated June 29, 2011, the Supreme Court ordered the return of the case to the trial court for the implementation of the compromise agreement.
Several criminal cases have been filed against Go, including the alleged falsification of documents, and over two dozen counts of estafa.
Go was also previously charged with violating laws on directors, officers, stockholders and their related interests (Dosri) loans. Current laws limit the amount of loans a bank can extend to its owners, affiliates, and subsidiaries.
The Supreme Court last year gave the green light for Manila courts to commence hearings on estafa cases filed against Go.