Senate to investigate DBP loan scandal


Posted at Sep 04 2011 02:44 PM | Updated as of Sep 05 2011 02:41 PM

MANILA, Philippines - A joint Senate committee will probe into the Development Bank of the Philippines’ questionable loan transaction with businessman Roberto Ongpin involving P660 million in depositors’ money.

Senator Sergio Osmeña, the chairman of the Senate committee on banks, financial institutions and currencies, said they will investigate the matter even with a pending graft case before the Ombudsman.

“We will still investigate. This is in aid of legislation. This is not for criminal prosecution, but in aid of legislation. We need to look at possible amendments, not only of banking laws, but most especially on the charter of DBP, Land Bank [and other government financial institutions],” he said.

The probe will be in tandem with the Blue Ribbon committee.

“As far as I know, TG [ Senator Teofisto Guingona III] and I will call hearings sometime,  after all supporting documents we’ve asked them are submitted to us,” Osmeña added.

The criminal complaint versus Ongpin et al was filed on August 5 before the Office of the Ombudsman.

Ongpin’s Delta Ventures Resources Inc. (DVRI) took out two loans totaling P660 million from DBP in 2009. He later bought 50 million shares of Philex Mining Co. from DBP for P637.5 million or P12.75 per share.

Less than a month later, he sold them for P21 a share to Philex Chairman Manuel Pangilinan.

The current DBP board claimed the transactions are considered behest loans. It said DBP could have made P42.4 million more if it had sold the stake directly instead of to Ongpin.

Osmeña said Ongpin, DBP board members and officials such as former DBP President Rey David will be required to appear. “We will call whoever needs to be called.”

Aside from possible violations of banking laws, the joint committee will also determine if there was insider trading and violation of the Securities Code in the transaction in question.

Senator Panfilo Lacson earlier called for a legislative inquiry into the matter. Besides the loan involving Ongpin, Lacson also sought a probe into other similar transactions with government banks and institutions during the Arroyo administration.

Lacson noted Ongpin’s closeness to former First Gentleman Jose Miguel Arroyo.

Ongpin earlier denied there was something irregular in the transactions.