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Tuesday, October 4, 2011

Was BSP Remiss in its Regulatory Functions?

3 October 2011

BSP Complex, Roxas Boulevard

Attn: Ms. Betty Christine C. Bunyi
Integrated Supervision Department II

Re: Letter dated 21 April 2003


We write on behalf of our clients, Ms. Ana Maria A. Koruga and Mr. Christopher Koruga, in response to your letter dated 16 August 2011.

Your letter dated 16 August 2011 states that the Integrated Supervision Department acted on our 21 April 2003 letter and referred to the Bangko Sentral ng Pilipinas (BSP) letters dated 5 September 2003 and 4 August 2009 attached thereto.

We invite your attention to the Answer dated 18 September 2003 filed in the case of Koruga v. Arcenas, et al. (Civil Case No. 03-985) at the Regional Trial Court of Makati City, Branch 138, by Messrs. Rafael B. Buenaventura, Antonio L. Alindogan, Jr., Juan Quintos, Jr., Melito S. Salazar, Jr., Vicente B. Valdepenas, Manuel L. Roxas III, and Ms. Fe B. Barin, who were then members of the Monetary Board of the BSP. In your Answer, you allege that “(i)t is only the (Monetary Board) which has the sole authority to place a bank under conservatorship or receivership pursuant to Sections 29 and 30 of the New Central Bank Act and Sections 67 and 69 of the General Banking Law of 2000, or preventively suspend or disqualify persons from serving as director or officers of a bank under Section 37 of the New Central Bank Act.”1

Despite advancing the said argument, the then members of the Monetary Board did not act accordingly and did not address the reliefs sought by our clients.

The letter dated 5 September 2003 merely stated that “(t)he Monetary Board, in its Resolution No. 1034 dated 24 July 2003, noted the report on the complaints of the minority directors/stockholders of Banco Filipino Savings and Mortgage Bank (BFSMB)” and that “the allegations relative to certain bank loans are being addressed and included in the Report of Examination (ROE) as of 31 October 2002.”

The Monetary Board, however, did not explain or act on any of the following:

  1. The reason/s why the directors and/or officers of Banco Filipino were not preventively suspended;
  2. The reason/s why Banco Filipino was not placed under conservatorship or receivership;
  3. The action taken by the Monetary Board and/or by the BSP, if any, based on the Report of Examination. The Monetary Board never informed our clients whether Banco Filipino submitted its comment on the Report of Examination after it was directed to do so by the Monetary Board pursuant to Resolution No. 1034 dated 24 July 2003, and what the consequences are, in the event that Banco Filipino was not able to submit its comment;
  4. The sanctions imposed, if any, on the directors and/or officers of Banco Filipino;
  5. The private stockholder relief/s, if any, which the Monetary Board provided our clients;
  6. If any action was taken by the Monetary Board consistent with our clients’ position, the reason/s why the Monetary Board opposed the Complaint filed by our clients;
  7. Specific remedial action sought by our clients on the bank loans detailed in Civil Case No. 03-985 and in our letter dated 21 April 2003.

Unless you can inform us otherwise, we can only conclude that the Monetary Board and/or the BSP have been remiss in its duty to act on our clients’ letter dated 21 April 2003 accordingly and have not addressed the reliefs sought by our clients. Please let us know what reliefs were provided to our client, if any, under our letter dated 21 April 2003 or in the Complaint filed in Civil Case No. 03-985.

Very truly yours,

1See page 11 of the Answer dated 18 September 2003.

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