RTC raps loose bank control of PHC funds
PAGING DTI: With pre-Christmas shopping picking up, the Department of Trade and Industry should issue a clear order against merchants charging different prices for customers paying cash and those using credit cards.
The law, as I understand it, is that there should be only one uniform price for either cash or credit card payments.
But many stores go around the rule by claiming that the credit card price is the correct price of the merchandize, and that the lower price for cash payment is a discounted price.
Everybody knows that this is a violation of the spirit of the law. Will the DTI continue to play blind to this malpractice? On whose side is the DTI anyway?
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LOOSE CONTROL: As a rule, most banks would freeze a client’s funds at the first hint of trouble.
That was why it seemed unusual that the venerable Bank of the Philippine Islands had chosen to allow persons claiming to be officers of a disputed firm to withdraw millions upon millions of corporate funds over the protests of bonafide stockholders.
Last Dec. 13, however, the Makati regional trial court ordered the BPI to stop its “unexplainable enormous disbursements… payable to cash” to Enrique Locsin, a nominee of the Presidential Commission on Good Government at the Philcomsat Holdings Corp.
One side question is if BPI is liable for damages arising from having refused to stop the questioned disbursements despite repeated warnings that such withdrawals may be irregular.
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INJUNCTION: Since 2004, PCGG nominee Locsin and associates have purported to represent PHC, an 81-percent owned subsidiary of POTC/Philcomsat, despite their reported lack of ownership stake in the parent companies.
Until recently, Locsin, Manuel Andal and Julio Jalandoni were the PCGG nominees to POTC and Philcomsat, parent companies of PHC. (The PHC, btw, is not sequestered.)
Judge Selma Palacio Alaras of the Makati RTC Branch 62 issued a preliminary injunction last Dec. 13 against BPI’s continuing to allow the Locsin group to draw from PHC funds.
Judge Alaras said in her order that dissipation of PHC assets could damage the interest of some 2,500 shareholders while the main case involving ownership and control of the firm is being heard.
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TRADING FROZEN: An indication of how serious is the problem is the suspension of the trading in PHC shares at the Philippine Stock Exchange because of the failure of the PHC management of Locsin to submit 2006 audited financial statements.
In Laras’ order, some facts emerged telling on the BPI Pacific Star Branch’s failure to follow common banking procedure in allowing the enormity and frequency of Locsin’s transactions.
The PHC, represented by Philcomsat president Lin Bildner, was forced to sue BPI because the bank had refused to heed their request to freeze or prevent unauthorized disbursement.
The PHC had written, to no avail, several letters to BPI asking the bank to freeze the accounts while the dispute is sorted out.
Many stockholders have been tempted to ask if someone at BPI is in cahoots with Locsin et al.
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PROXY VOIDED: Bildner noted that at least one court had annulled Locsin’s proxy and right to sit on the PHC board.
In 2006, the Makati RTC invalidated the Locsin-held proxy as it was allegedly issued by entities that were no longer shareholders in POTC or Philcomsat.
That RTC Makati division also annulled the election of the 11-member Locsin board of PHC while validating the Philcomsat proxy of Victor C. Africa (one of the shareholders that comprise the POTC/Philcomsat majority shareholder Bildner-Africa group).
Alaras ruled that PHC has a substantial right over the assets since PHC is “the same individual who controls and operates PHC’s mother company Philcomsat….”
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FUNDS DIVERTED: Records show that despite the dispute over ownership and management, the BPI still allowed one group (Locsin faction) to withdraw around P125 million in the past 12 months alone.
Ms. Zenaida Alcantara, a certified public accountant and the finance officer and internal auditor of Philcomsat, testified that PHC expenses from 2004 to 2005 under the Locsin’s stewardship had increased from P37 million to P136 million.
She also described Locsin’s allegedly hiding of disbursements to himself and others in the form of monies supposedly paid to parent companies POTC/Philcomsat, but which were never received by either company.
These diverted funds, she said, amounted to P57 million by 2005.
In less than two months ending Dec. 4, 2007, she said, P45 million was withdrawn by the Locsin group from another BPI account. She testified that these disbursements were unusual because they were made to “cash” and encashed by a PHC messenger.
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NO PROOF: Bank service manager Joy Rodriguez, who testified to “personally servicing” the PHC account, confirmed PHC’s time deposit statements and admitted that from November 2006 to November 2007, over P125 million had been withdrawn by Locsin et al.
Locsin, represented by counsel, did not explain the withdrawals. Also, he did not submit board resolutions to show that the withdrawals were authorized.
The only witness presented by Locsin was PHC Corporate Secretary Delfin Angcao.
Despite Angcao’s testimony, Judge Alaras said she found no evidence that the huge disbursements during the questioned period “which appeared to be mostly made payable to cash had been duly authorized, discussed, or much worse, approved or authorized by the defendants (Locsin) intervener’s board of directors in their supposedly regularly held board meetings.”