ShareThisMANILA – Criminal and administrative charges were filed against Local Water Utilities Administration (LWUA) chairman Prospero Pichay Jr. and four members of the agency’s Board of Trustees for alleged misuse of P400 million worth of agency funds.
The Department of Finance (DOF) said it filed the criminal charges before the Department of Justice (DOJ) Tuesday and the administrative complaints before the Office of the President Wednesday.
Pichay
Pichay and LWUA Board members Renato S. Velasco, Susana D. Vargas, Bonifacio Maria M. Peña Sr. and Daniel I. Landingin are facing charges for violation of the Manual Regulations for Banks, the Anti-Graft and Corrupt Practices Act and Article 217 of the Revised Penal Code.
Finance Secretary Cesar Purisima said the cases stemmed from the “highly irregular” and “anomalous” buy-out of 60 percent, which is a controlling stake, in Cabuyao, Laguna-based thrift bank Express Savings Bank and for infusing P480 million worth of capital in the bank.
The 35-page criminal complaint states that “these offenses have arisen from their direct and willful participation in facilitating the highly irregular and anomalous takeover… of Express Savings Bank, Inc., a financially troubled bank undergoing rehabilitation, in wanton violation of pertinent banking laws and rules and at a gross disadvantage to LWUA and the [n]ational [g]overnment.”
DOF investigation showed that LWUA, in 2008, planned to set up a Water Development Bank but this was turned down by the central bank on account of the moratorium in creation of new banks in restricted areas like Metro Manila.
Thus, LWUA instead bought a total of 445,337 shares of stock in Express Savings Bank for P80 million during the same year and infused P400 million in fresh capital the following year “despite the obvious and considerable drawbacks” in investing in bank.
Data gathered by the Finance department from the Securities and Exchange Commission (SEC) showed that the bank, originally controlled by the Gatchalian family who owns The Wellex Group, Inc., suffered losses of up to P27.87 million from 2005 to 2009 and was capital deficient of P51.77 million during the same period.
The complaint said, the acquisition happened “without…the requisite prior approvals from Finance, OP and the Monetary Board.”
Purisima said filing of the charges “is consistent with the Aquino administration’s promise of cleansing the government of corrupt officials as a way to rationalize GOCC (government-owned and -controlled corporations) operations.”
“Let this serve as a warning to other GOCC officials that the government is serious on eradicating corruption in the bureaucracy and is looking at every agency in its run against offenders,” he added. (PNA)