(Update) PDIC says P6-B of Legacy deposits doubtful
abs-cbnNEWS.com | 03/12/2009 7:31 PM
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Over P6 billion worth of deposit accounts from the 12 closed Legacy rural banks may not be eligible for insurance payment, the Philippine Deposit Insurance Corp. (PDIC) said Thursday.
PDIC President Jose Nograles said in a press conference Thursday that as of March 10, they have verified about 55 percent of some 135,000 accounts in the failed Legacy-linked banks. The deposit accounts were examined with the help of an external audit firm, KPMG-Manabat.
Of the verified accounts with P6.43 billion worth of deposits, Nograles said only 3 percent, or P381 million, were classified as validated or eligible for insurance payment.
Accounts classified as doubtful amounted to P6.05 billion.
Nograles said that of the doubtful accounts, deposit accounts with P5.42 billion had incomplete documents. The state deposit insurer requires a bank’s copy of official receipt, general ledger, subsidiary ledger, original deposit slip, debit/credit ticket and proofsheet to declare a deposit account as eligible for insurance claim.
On the other hand, about P621.36 million involved 'questionable transactions, which the PDIC investigators and legal team will subject to further review. These include accounts with proceeds from fictitious loans, matured pre-need plans that were converted into deposit accounts, and accounts related to Legacy's car and motorcycle promotions.
PDIC's legal department is already examining the said accounts for potential additional cases against de los Angeles and other Legacy officials.
Meantime, the Parents Enabling Parents (PEP), a coalition of pre-need planholders, said they were not surprised about the initial results of PDIC's audit, but they urged the senate to subpoena all Legacy rural bank officials and force them to bring out official documents.
Philip Piccio, PEP president, told ABS-CBN News, "This will be included in the testimonies in the next senate hearings that there really is an act to hide all these documents. I hope the senate will act swiftly or else those documents may get burned."
Senator Mar Roxas, who chairs the Trade and Commerce Committee that is conducting the senate hearings, echoed Piccio's concerns. "We will summon PDIC to the senate hearings, including the officials of the Legacy banks, to bring the documents that show how Celso de los Angeles connived with corrupt government officials."
Legacy's owner, Celso de los Angeles, on the other hand, questioned the accuracy of PDIC's report. In a text message to ABS-CBN News, he said Legacy's rural banks used to undergo regular audit from the Bangko Sentral ng Pilipinas (BSP).
"BSP audits over the years do not reflect that. My knowledge is based on these reports since I do not have operational exposure. If PDIC's statement is accurate, why did BSP recruit the 5 bank presidents as witness, exempting them from [criminal cases filed by BSP]," he said.
Overwhelming
Meanwhile, the PDIC's Nograles said they have alloted 75 percent of their entire organization's manpower pool for the receivership, investigation, and payout tasks related to the 12 closed Legacy rural banks.
Romeo Mendoza Jr, PDIC's general counsel, told abs-cbnnews.com/Newsbreak that the work related to Legacy has been unprecendented in PDIC. "The volume of documents have been overwhelming. The 12 Legacy rural banks involve 48 to 50 branches, and we have to go over each vault of these branches."
He added that "The initial findings of fraud is already tremendous. This means there is potentially a lot more fraud. That's why we have to be careful in paying out because these depositors may be fraudulent, too."
"As of March 10, PDIC said they have already paid 70 percent or P138.5 million in insurance claims of validated regular savings accounts with balances of P100,000 and below.
Meanwhile, Nograles said the PDIC still needs to examine the remaining 45 percent of Legacy's bank acocunts, representing about 60,664 separate accounts with an estimated total insured amount of P7.57 billion.
The Legacy Group has closed 12 rural banks as of March 10, which include the Rural Bank of Paranaque (P4.49 billion), Pilipino Rural Bank (P1.86 billion), Rural Bank of Bais (P651.56 million), Rural Bank of San Jose (P701 million), Bank of East Asia (P698.07 million), and First Interstate Bank (P427.13 million).
Other banks include the Philippine Countryside Rural Bank (P1.44 billion), Dynamic Rural Bank (P1.73 billion), Nation Bank (P571.05 million), Rural Bank of Carmen (P391.44 million), Rural Bank of DARBCI (P655.12 million), and San Pablo City Development Bank (P192.49 million). - with Zen Hernandez, ABS-CBN News and Lala Rimando, abs-cbnnews.com/Newsbreak
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