Sandigan junks graft raps vs Gatchalians

MANILA, Philippines — The Sandiganbayan has affirmed the dismissal of criminal cases against Sen. Sherwin Gatchalian in connection with the alleged anomalous acquisition by the Local Water Utilities Administration (LWUA) of a thrift bank partially owned by his family.

In a 30-page resolution promulgated on Nov. 17, released to the media yesterday, the court’s Special Fourth Division said “no new arguments or any good and cogent reason” was raised in the motion for reconsideration of the Office of the Ombudsman’s prosecution team to warrant the reversal of its Oct. 18, 2016 ruling dismissing the cases of graft, malversation of public funds and violation of the Manual of Regulation for Banks (MORB) against Gatchalian.

In the same ruling, the Fourth Division also granted the motion for reconsideration of the other members of the Gatchalian family, namely Valenzuela Rep. Wesley, businessman Kenneth and their parents William and Dee Hua, praying for the dismissal of their graft case.

The Valenzuela congressman said his family “is vindicated” and the “truth has finally prevailed. We have maintained from the very start that we are innocent of the accusations against us.”

The court also ruled to dismiss the cases of graft, malversation and violation of the MORB against all the other accused except for former LWUA chairman and incumbent Surigao del Sur Rep. Prospero Pichay and former LWUA acting deputy administrator Wilfredo Feleo Jr.

The court said it found probable cause to proceed with the trial of Pichay and Feleo, who face three counts each of graft and one count each of violation of the MORB.

Aside from the Gatchalians, also acquitted were former LWUA officials Eduardo Bangayan and Aurelio Puentevella; Wellex Group Inc. corporate executive Yolanda dela Cruz; Forum Pacific Inc. (FPI) executives Elvira Ting, Peter Salud, Geronimo Velasco, Jr., Rogelio Garcia, Lamberto Mercado Jr., Evelyn dela Rosa, Arthur Ponsaran and Joaquin Obieta; Express Savings Bank Inc. (ESBI) executives George Chua, Gregorio Ipong, Generoso Tulagan, Wilfred Billena and Edita Bueno.

The cases against former LWUA executives Enrique Montilla III and Daniel Landingin were also dismissed on the account of their death.

Filed by the Office of the Ombudsman in July 2016, the cases stemmed from LWUA’s acquisition of ESBI, a local thrift bank based in Laguna owned by FPI and the Gatchalian family’s Wellex Group allegedly without the approval of the Office of the President, the Monetary Board of the Bangko Sentral ng Pilipinas and the Department of Finance.

The alleged anomalous acquisition was done in 2009 during Pichay’s term as LWUA chairman.

Based on the information of the cases, LWUA bought a total of 445,377 shares of stock from ESBI for P80 million despite the bank’s insolvency status after suffering substantial net losses and capital deficits for five straight years, or from 2005 to 2009.

The LWUA also allegedly deposited P700 million to ESBI’s savings account to augment the bank’s capital stocks, again without the required approval of the BSP’s Monetary Board.

In its ruling, the court said the prosecution failed to show that the executives of ESBI conspired with the LWUA officials of the bank’s acquisition and the augmentation of its capital stocks.

“It bears stressing that the accused ESBI directors assumed their positions only after the alleged illegal and unlawful acquisition of the shares by LWUA,” the court’s ruling read.

The resolution was penned by Associate Justice Geraldine Faith Econg with the concurrence of Associate Justices Alex Quiroz, Reynaldo Cruz, Sarah Jane Fernandez and Edgardo Caldona. – Delon Porcalla, Marc Jayson Cayabyab