The former chief finance officer of the Legacy Group of Companies on Monday said Legacy owner Celso delos Angeles used P38 million in the preneed firm's funds for his 2007 electoral bid as municipal mayor of Santo Domingo, Albay.

Legacy CFO Namnama Santos said the preneed firm Legacy Consolidated Plans Inc. gave a total of P38 million in company funds for delos Angeles' campaign-related expenses, which included a total of P1.8 million payment to Paranaque Rep. Ed Zialcita as consultancy fee.

She said the checks were disbursed from January to August 2007. "Yes, he would call us. These were for election offenses," Santos said in the Senate inquiry on the preneed industry.

Delos Angeles, meanwhile, denied receiving the money from LCPI adding that the money came from his private company, Legacy Motors.

He also denied using the money for the elections.

Another Legacy official, former COO Carolina Hinola, also confirmed that LCPI deposited funds into delos Angeles’s personal banks accounts at the Pilipino Rural Bank and Philippine Countryside Rural Banks “to fund his maturing personal checks issued for the Center Rural Bank depositors who invested into the SNS 3 program.”

“Further to my knowledge, The total amount to certificates of time deposits which were converted into shares of stocks under this scheme totaled to as much as  P110 million,” Hinola said.

Last week, the two Legacy officials faced the local media and showed documents that traced funds from the Legacy group making its way to the bank accounts of allies of several politicians.

The Bangko Sentral ng Pilipinas has filed two cases of syndicated estafa against Celso de los Angeles and top management of the Legacy Group and allied companies for allegedly siphoning P487 million of depositors and government money.

'I was a glorified messenger'

In her testimony, Hinola clarified that she was less a COO of the Legacy Group of Companies and more of a “glorified messenger” of delos Angeles.

“While my designation was chief operation officer, the fact [was] that I was more of a glorified messenger in that I deliver the directives and instructions of Mr. Celso delos Angeles, the owner of the Legacy Group to the Marketing Department, regarding the marketing operations of the company,” said Carolina Hinola.
    
Hinola said she do not have the power to make company policy as her task is to coordinate with presidents of rural banks regarding their various products offered such as the Double Your Money, Pakotse Program, Pre-need Buyback and SNS 3.

“At the end of the day it is Mr. Celso delos Angeles who has the final say regarding policy of the Legacy Group of Companies composed of the Legacy Consolidated Plans inc., SPPI, Legacy Card, Multimedia Inc. CGA Holdings, Computer Tech Resource Provider including the rural banks,” said Hinola.

Hinola identified the rural banks under the Legacy Group as the Rural Bank of Carmen, Philippine Countryside Rural Bank, Bank of East Asia, First Interstate Bank, Nation Bank, Rural Bank of Paranaque, San Pablo City Development Bank and Dynamic Rural Bank.

Hinola told senators that she was also appointed, without her knowledge, as treasurer of the Rural Bank of Paranaque.

“I am emphasizing that at no instance did I perform my function relating to the said bank and I was never involved nor have any knowledge as to its banking operations. Further I have never attended any of banks board meetings nor did I receive any compensation as such treasurer,” she said adding that she only knew of the appointment in 2007 when Delos Angeles told her to attend a conference with the Bangko Sentral ng Pilipinas.

No cash infusion

When the PDIC took over the Center Rural Bank in February 2006, Hinola claimed that delos Angeles convened the entire marketing group of Legacy and instructed them to offer the SNS 3 product to the rural bank’s depositors.

She explained that through the SNS 3, depositors will have to subscribe to shares of stocks of Legacy Motors, Legacy Card Inc, Shining Armor Realty Corporation or One Realty Corporation. Depositors will use their Center Rural Bank certificates of time deposits as payment for the subscription of shares of stock.

“The shares of stock will be subsequently bought by Mr. Delos Angeles at twice its par value amount payable in three years,” said Hinola. Delos Angeles, she said, will issue personal checks as his payment for the share of stock.

“Mr. delos Angeles personally explained to us that SNS 3 Product will be offered to the depositors of Center Rural Bank so as to prevent them from claiming their deposits from PDIC and withdrawing their other deposit accounts from other Legacy affiliated banks,” she said.

Hinola added: “To my knowledge, while the books of Legacy will show investments are coming in, there was no actual cash infusion into the company. In fact, these sales transactions were recorded as receivables from PDIC.”

As the COO of the company, Hinola said she knows the volume of investments that comes in and believed that the company was financially stable.

However, it was in 2008 when she learned that the company was “seriously under funded.”

“In fact, we were at times scrambling to look for funds that will settle all obligations and checks due which averages at around P300-million a month. I was really surprised as based on the volume coming in which I monitored as COO, I believe in good faith that legacy is stable," said Hinola.