SENATOR-elect Sherwin Gatchalian is facing graft charges before the Sandiganbayan over the transfer of close to P780 million in Local Water Utilities Administration funds to Express Savings Bank Inc., which was owned by the Gatchalian family, in 2009.
Express Savings Bank Inc. is now under receivership.
Ombudsman Conchita Carpio Morales upheld the indictment of former officials of LWUA, corporate executives of Wellex Group Inc., Forum Pacific Inc. and ESBI in connection with the anomalous bank acquisition.
Indicted were ex-LWUA officials Prospero Pichay Jr., Eduardo Bangayan, Aurelio Puentevella, Enrique Senen Montilla III, Wilfredo Feleo, Daniel Landingin and Arnaldo Espinas; WGI executives Sherwin Gatchalian, Dee Hua Gatchalian, William Gatchalian, Elvira Ting, Kenneth Gatchalian and Yolanda de la Cruz; FPI executives Peter Salud, Geronimo Velasco Jr., Weslie Gatchalian, Rogelio Garcia, Lamberto Mercado Jr., Evelyn de la Rosa, Arthur Ponsaran and Joaquin Obieta, and ESBI executives George Chua, Gregorio Ipong, Generoso Tulagan, Wilfred Billena and Edita Bueno.
Gatchalian on Wednesday deplored the Ombudsman’s decision to include him and his family among those to be charged for the sale of Express Savings Bank Inc. to LWUA seven years ago.
At the same time, the outgoing Valenzuela City congressman said he remained confident the graft charges against him would be dismissed because the truth was on his side.
The criminal cases resulted from the acquisition by LWUA of ESBI, a local thrift bank based in Laguna that was owned by the Gatchalians, FPI and WGI.
On March 24, 2009, the LWUA board composed of Pichay, Bangayan, Montilla, Puentevella and Landingin approved Resolution 56 of 2009 authorizing the acquisition of ESBI without the requisite regulatory approvals from the Monetary Board of the Bangko Sentral, Department of Finance and Office of the President.
“The acquisition was also made in contravention of the legal opinion rendered by the Office of the Government Corporate Counsel that opined it is subject to review by the DoF and approval by the OP, including compliance with applicable banking laws, rules and regulations,” the Ombudsman said.
The Finance Department objected to the acquisition following the ongoing rationalization and streamlining of the government corporate sector, and that the financial health of the thrift bank must be closely examined and validated beforehand.
“To compound the problem, Pichay et al approved the acquisition despite substantial negative audit findings uncovered during the due-diligence stage. Audit findings made by a private firm revealed that the bank was insolvent after suffering substantial net losses and capital deficits for five straight years from 2005 to 2009,” the Ombudsman said.