Pichay denies anomaly in LWUA's acquisition of thrift bank

Local Water Utilities Administration chair Prospero Pichay on Thursday formally denied the accusations that he misused public funds over the agency’s acquisition of a troubled thrift bank in 2008. Pichay submitted to a Department of Justice (DOJ) panel his counter-affidavit saying there was no irregularity in the acquisition of 60 percent of the outstanding shares of cash-strapped, Laguna-based bank Express Savings Bank Inc. (EXSBI). LWUA, a government-owned and -controlled corporation, is a specialized lending institution for the promotion, development, and financing of local water utilities, and a depository of the reserves for capital improvement of local water utilities. Speaking to reporters, Pichay said that in 2008, the LWUA had the option of acquiring another thrift bank with a capitalization of P40 million. He said EXSBI had a capitalization of P49 million, the amount being the difference between EXSBI's initial capitalization of P100 million and its deficiency of P51 million. "The second bank's capitalization was P9 million more than the previous one. If you were in my shoes, what will you buy?" said Pichay. He added that the acquisition of EXSBI proved to be a good decision because 12,000 households were able to borrow money from the bank. "In fact, last year, it made P31 million. As of today, it made around P20 million. We expect it to make at least P40 to P45 million this year. Look at the benefits. We were able to lend P300 million to water districts, and 12,000 households benefited from this," Pichay said. Pichay and three members of the LWUA board are facing charges of malversation of public funds over the acquisition of the bank, which was then controlled by the Gatchalian family. The complaint was filed by Finance Secretary Cesar Purisima, who said the government lost about P480 million because of the acquisition. "The LWUA Board willfully misused and dissipated public funds to acquire a financially troubled and failing bank, and in the process, bailed out the Gatchalian family from an unprofitable investment at the expense of LWUA and the national government," read Purisima's complaint. On Thursday, Pichay hit the administration of President Benigno Aquino III for singling out those perceived to be allies of former President Gloria Macapagal-Arroyo. "Of course it's political persecution. Look around you. Everybody has been accused of either tax evasion, plunder... so you just have to agree with them so you'll not be persecuted," said Pichay. The Aquino administration has repeatedly denied it was harassing Arroyo's family and their alleged allies. - KBK, GMA News