PDIC files case vs Banco Filipino officials
The state-run Philippine Deposit Insurance Corp. (PDIC) filed at the Department of Justice (DOJ) Task Force on Financial Fraud a criminal case against the chair and president and 15 former directors and officers of the closed Banco Filipino Savings and Mortgage Bank for conducting business in an unsafe or unsound manner. PDIC said the criminal act caused losses to the bank amounting to P789.46 million.
Charged with the chair and president were the vice chair, four directors, corporate secretary and executive vice president, and other high-ranking officers.
The PDIC complaint said more than P700 million in legal fees were paid to various legal firms without any contracts or supporting documents during the period Banco Filipino was in dire financial difficulty until it was closed and placed under the PDIC receivership.
Banco Filipino was ordered closed by the Monetary Board of the Bangko Sentral ng Pilipinas (BSP) and placed under receivership on March 17, 2011. PDIC, upon takeover of the bank’s assets, records and affairs, discovered that payments to these legal firms were made without the required “pass upon” review of the then BSP comptroller.
Moreover, a partner of the law firm who was paid P225.87 million was a director of the bank.In its complaint, PDIC said the disbursements of legal fees without a written contract and the BSP comptroller’s “pass upon” review were contrary to the duties and diligence required from directors and officers of a banking institution and constituted “conducting business in an unsafe or unsound manner.”
The PDIC Charter punishes the conduct of business in an unsafe or unsound manner with imprisonment from six years to 12 years, or a fine of not more than P10 million, or both. PDIC earlier filed three criminal complaints at the DOJ involving P5.2 billion against the former directors, officers and employees of the shuttered Banco Filipino due to other irregularities and anomalies discovered by the PDIC as receiver of the closed bank.
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