Businessman blamed for LBC Bank’s closure arrested

Police have arrested the businessman who allegedly drove LBC Bank to bankruptcy in 2006 after acquiring millions of pesos in loans from it that he failed to pay.

Benito Ramon Araneta was arrested on Tuesday in a posh Ayala Alabang subdivision in Muntinlupa City, the Philippine National Police said in a statement Wednesday.

Araneta is facing large-scale estafa, a non-bailable offense, after he acquired a P229.5-million loan from LBC Bank even without collateral.

Araneta was supposedly in cahoots with then-LBC Bank president Ma. Eliza Berenguer, who authorized the loan. Berenguer allegedly covered up for Araneta, saying the loan has been paid.

The unpaid loan was blamed for the bank's closure.

After the bank's shutdown, the Philippine Deposit Insurance Corporation (PDIC) took over the bank. PDIC's investigation showed the anomaly involving Araneta and Berenguer.

"It was found out that there was a collusion between the two. They were able to appropriate the money for personal use," said Chief Supt. Reuben Theodore Sindac, PNP chief police information officer.

"This is unsafe and unsound bank practices that resulted in the damage of undetermined number of depositors of their hard-earned money," he added.

The suspect has 15 counts of estafa pending at the sala of Judge Maximo de Leon of the Makati Regional Trial Court Branch 143.

Araneta, who has a pending arrest warrant since 2011, is currently under the custody of the police's Intelligence Group.  —Rouchelle Dinglasan/KBK, GMA News