Mandaluyong court orders arrest of 5 ‘dummies’ of bankrupt Lehman Brothers

MANILA, Philippines — A Mandaluyong City court on Thursday ordered the arrest of five Filipinos connected with the bankrupt US-based investment bank Lehman Brothers for alleged violation of the Anti-Dummy Law. Judge Edwin Sorongon of the Mandaluyong Regional Trial Court (RTC) Branch 214 also issued hold-departure orders against Michael Rabonza, Carlos Mañalac, Norman Macasaet, Edilberto Castañeda, and Ana Marie Katigbak for their "failure to submit themselves to the jurisdiction of the court." Sorongon based his order on a complaint filed by businessman-restaurateur Victor "Vicvic" Villavicencio against the Lehman Brothers and its Philippine affiliates - Philippine Investment One and Philippine Investment Two - for violation of the country’s anti-dummy laws and constitutional restrictions on foreign ownership of land. Sorongon denied several pleadings, including a motion for reinvestigation of the case and a “motion to quash" the arrest warrants, that were filed by the accused, saying in his order dated Sept. 4, 2008 that the accused presented no "new issues but mere rehash and reiterations of their earlier arguments and no new substantial issues have been raised." The court also junked the motion for reinvestigation filed by the accused, saying that there "was probable cause for their indictment" based on the complaint filed by Villavicencio, owner of the famed Kamayan and Saisaki restaurants. In his complaint, Villavicencio said he entered into a restructuring deal with the erstwhile Equitable-PCI Bank that allowed him to redeem the properties within 10 years. However, Equitable-PCI sold the assets soon after to an entity called Philippine Investment Two Inc., which is owned by Philippine Investment One Inc. Villavicencio later discovered that the Lehman Brother was a majority shareholder of Philippine Investment One Inc. Villavicencio said he now wants to buy back the property from the Lehman Brothers-owned firm for P60 million to P65 million, the same price at which they bought it from Equitable-PCI Bank. From Sept. 2004 to March 2005, Villavicencio said Lehman Brothers and the accused conspired and simulated the existence of several corporations in order to make it appear that Philippine Investment Two Inc. is qualified to own real properties in the Philippines. But Villavicencio said an examination of the records would show that Lehman Brothers is the real owner. The Philippine Constitution bars foreigners from owning land in the Philippines. Despite having Filipino investors in the company, the accused only have one share each of both Philippine Investment One and Philippine Investment Two. Lehman Brother’s Singapore unit owns 1.24 million shares in each of the two corporations. The Ant-Dummy Law limits the management, operation, administration and control of corporations to Filipino citizens. From a net worth of almost $700 billion, Lehman recently filed for bankruptcy protection recently after several failed business ventures, the largest in the history of the United States. - GMANews.TV