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(Update) Supreme Court upholds litigation for P4.5-B bank estafa case

April 18, 2008 2:31am

MANILA, Philippines - The Supreme Court has affirmed the appellate court’s decision for the resumption of litigation on the P4.5-billion estafa case against the officers of closed Urban Bank.

In a two-page resolution, the second division said, "The court resolves to deny [the officers’ petition to junk the decision] for failure to sufficiently show any reversible error in the assailed judgment to warrant the exercise by the court of its discretionary appellate jurisdiction in this case."

The Fortun, Narvasa and Salazar Law Group could not be reached as of press time. They represent those involved in the case, including Nida S. Santos, Milagros Santiago, Rowena Punzalan, Chulla Formanes. Loida O. Payonga and Amalia Ordas.

The bank officers haled the issue before the high court after failing to get the lower court’s support for the second time.

In its first decision in October 2007, the appellate court ordered the Makati Regional Trial Court to revive the case. It said the officers should not be allowed to get away without explaining the allegedly anomalous transactions.

It reaffirmed the decision in December last year. "The bank is under obligation to treat the accounts of its depositors with utmost care, always having in mind the fiduciary nature of their relationship," the appellate court has said.

"[The officers of Urban Bank] should not be allowed to go scot-free without shedding light on the anomalous transactions involving billions of pesos that led to [the bank’s] closure and even to the alleged suicide of accused [Teodoro C. Borlongan]," it added.

Mr. Borlongan, who died in 2005, was the former bank president and was named one of the respondents in the case. The issue stemmed from several complaints lodged with the Department of Justice in September 2000.

Depositors and stakeholders asked state prosecutors to file criminal charges against the officials for allegedly releasing in short time large sums of money to buy "substandard receivables" from subsidiary Urban Corp. Investments, Inc.

This came at a time when the bank was facing liquidity problems, the complainants said. Such fraudulent transactions eventually led to the bank’s closure, they added.

Government prosecutors eventually indicted the bank executives in three separate cases before the Makati court in December 2000. - Ira P. Pedrasa, BusinessWorld
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