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PCGG loses “behest loans" case before Supreme Court


MANILA, Philippines — The Supreme Court on Wednesday affirmed the Ombudsman’s dismissal of graft charges against officers of the Philippine National Bank and Development Bank of the Philippines accused of granting behest loans to a coconut oil manufacturer and the Philippine Journalists Inc. (PJI), respectively. The high court’s Third Division dismissed for lack of merit the consolidated petitions filed by the Presidential Ad-Hoc Committee on Behest Loans and the Presidential Commission on Good Government (PCGG) against the state-owned financial institutions and the private corporations. The Ad Hoc committee sought to stop the Ombudsman’s August 12, 1997 order of Ombudsman Aniano Desierto dismissing its complaint for graft against private respondents Ulpiano Tabasondra, Enrique Herbosa, Zosimo Malabanan, Arsenio Lopez, Romeo Reyes, Heradeo Cuballa, Nilo Roa, Benigno del Rio and Juan Trivino. On the other hand, the PCGG sought a reversal of the Ombudsman’s November 28, 1997 order dismissing two graft complaints filed against private respondents Placido Mapa, Jose Tengco, Rafael Sison, Alejandro Melchor, Rosario Olivares, Alejandro Maramag, Evelyn Nicasio, Tuynita Soriano, Jose Abundo, Caridad Orpiada and Benjamin Romualdez, brother-in-law of the late President Ferdinand Marcos. But the high court ruled that it is within the discretion of the Ombudsman to determine whether a criminal case should be filed or not. “We find that the petition miserably fails to show that the Ombudsman committed grave abuse of discretion so as to call for the exercise of our supervisory powers over him. As long as there is substantial evidence in support of the Ombudsman’s decision, that decision will be overturned," the high court ruled Court records showed that on October 8, 1992, then President Fidel Ramos issued an administrative order creating the ad hoc committee tasked to investigate all behest loans, to make an inventory of and review all non-performing loans, whether behest or not behest. Several loan accounts were referred to the committee for investigation, among them the loan of Coco-Complex Philippines Inc. (CCPI) from the PNB and that of the PJI from the DBP. CCPI, a domestic corporation primarily incorporated for manufacturing coconut oil, applied for a guarantee loan in the amount of P9.27 million for the purchase of an oil mill to be supplied by Krupp of Germany. The ad hoc committee claimed that on January 17, 1968 the loan application was approved despite that CCPI had no sufficient collateral and capital to be entitled to the amount of the loan. Subsequently, on February 10, 1972, CCPI obtained an additional loan for restructuring and equity conversion of its outstanding obligation up to 1972 without sufficient collaterals and adequate capital to ensure not only the viability of its operation but its ability to repay all its loans. The committee noted that as of March 31, 1992, the outstanding obligation of CCPI to the PNB amounted to P205.88 million. The case was later consolidated with the petition for certiorari filed by PCGG involving behest loans it filed against the former officers of the DBP identified as Mapa, Sison, Melchor, and Reyes. The PCGG also indicted the officers of PJI headed by Romualdez, Olivares, Maramag, Nicasio, Soriano, Abundo and Orpiada. Based on the complaint of the PCGG, the DBP granted two industrial loans were granted by DBP in favor of PJI. The first was in the amount of US$1.74 million, and the second amount approved was for US$124,140.00 In the complaint, it was alleged that the first loan was without sufficient collateral, as PJI did not have sufficient capital to be entitled to the loan. The PCGG claimed that as of June 30, 986, PJI had an outstanding and unpaid balance of P58.85 million. Based on these findings, the PCGG filed two cases with the Ombudsman against the respondents for violation of the anti-graft law. The Ombudsman, however, dismissed the complaints on the grounds that the cases are barred by prescription and that the allegations of that the loans were insufficiently secured were contradicted by the evidence on record. With regard to the case filed by ad hoc committee, the Ombudsman dismissed the case on the ground that the Board of Directors of the National Investment and Development Corporation, which approved the loan in favor of CCPI, should be the one indicted and not the officers of PNB. The PCGG elevated the case before the high court for reconsideration. - GMANews.TV
Tags: pcgg, behestloan
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