RCBC sues Bangladesh Bank for defamation

MANILA, Philippines — Publicly-listed Rizal Commercial Banking Corp. (RCBC) sued the Bank of Bangladesh last week for maligning the Yuchengco-led bank and its executives with baseless allegations of complicity in the $81 million cyber heist three years ago.

RCBC’s lead lawyer Tai-Heng Cheng, a partner at the New York office of law firm Quinn Emanuel Urquhart & Sullivan LLP, said in a statement the claims of Bangladesh Bank are baseless and have harmed RCBC’s reputation as one of the best banks in the Philippines.

“Bangladesh’s suit is nothing more than a political stunt to try to shift blame from themselves to RCBC.  The action taken by RCBC finally puts the case in a court where – at the very least – the alleged crime took place,” he said.

RCBC’s defamation suit filed last March 6 before the Regional Trial Court in Makati City references Bangladesh’s failures to secure its network and disclose those failings on a timely basis.

The complaint also refutes Bangladesh Bank’s allegation that RCBC played a premeditated role in the cyber theft. “Bangladesh Bank had lost the $81 million the minute it left defendant Bangladesh Bank’s account at the NY Fed and way before it had even reached the Philippines… there is absolutely no act attributable to RCBC that caused the payment instructions to reach the NY Fed and the correspondent banks,” the bank said in its complaint.

RCBC said its “reputation has come under the vicious and public attack by Bangladesh Bank since 2016.

“It is public knowledge that Bangladesh Bank has embarked on a massive ploy and scheme to extort money from plaintiff RCBC by resorting to public defamation, harassment and threats geared toward destroying RCBC’s good name, reputation, and image, all with the intention of getting RCBC to pay Bangladesh Bank money that RCBC does not have in its custody or possession and which it does not owe to Bangladesh Bank,” it said.

Thea Daep, partner at the Manila law firm of Villaraza & Angangco, said RCBC had nothing to do with the theft of the funds and has cooperated fully with every investigation into the matter.

“We will prove in the Philippine court that Bangladesh’s defamation is nothing more than a blatant attempt to shift the blame and cover up their own liability at RCBC’s expense,” Daep said.

The suit was served to Abu Hena Mohammad Razee Hasan, deputy governor and head of Bangladesh Bank Financial Intelligence Unit (BFIU) and the other delegates who are in the Philippines this week.

Bangladesh Bank sued RCBC last month in the US District Court for the Southern District of New York to recoup losses it suffered when unidentified hackers stole $81 million from its account at the Federal Reserve Bank of New York.

The fund found its way to the Philippines and the bank was used as a conduit through fictitious accounts. Of the total amount, about $15 million has been recovered.

The Bangko Sentral ng Pilipinas (BSP) imposed a record P1 billion fine against RCBC in August 2016 for non compliance with the New Central Bank Act in connection with the cyber theft.

On the other hand, RCBC Jupiter branch manager Maia Deguito was found guilty of eight counts of money laundering and was sentenced to a 32- to 56-year prison term and a $109 million fine last January.