Sen. Gatchalian posts P90,000 bail for graft, malversation

Sen. Sherwin Gatchalian on Friday posted P90,000 bail bond for the three cases filed against him in connection with the alleged anomalous acquisition of a thrift bank owned by his family by the Local Water Utilities Administration (LWUA) in 2009.

Gatchalian's bail, posted at the Sandiganbayan Seventh Divison, was for one count of graft (P30,000), one count of malversation of public funds (P40,000), and one count of violation of the Manual of Regulation for Banks (P20,000).

Aside from Gatchalian, three other respondents in the cases also posted P90,000 bail each on Friday. They were Forum Pacific Inc. (FPI) executives Geronimo Velasco, Jr., Joaquin Obieta  and Arthur Ponsaran

Meanwhile, the primary accused in the case, Surigao del Sur Rep. Prospero Pichay Jr., has yet to post bail as of the closing of the Seventh Division Office of the Clerk of Court on Friday.

Also yet to post bail are 20 other co-accused in the cases including former LWUA officials as well as the members of the Gatchalian family, namely WELLEX Group Inc. (WGI) corporate executives Dee Hua Gatchalian, William Gatchalian, Kenneth Gatchalian and FPI executive Weslie Gatchalian.

Weslie is recently elected as the First District Representative of Valenzuela City, replacing Sherwin, his brother.

The cases filed by the Office of the Ombudsman on Wednesday stemmed from the alleged anomalous acquisition by LWUA under then chairman Pichay of Express Savings Bank Inc. (ESBI) in 2009 in the amount of P80.003 million.

The ESBI is a local thrift bank based in Laguna jointly owned by the FPI and the Gatchalians' WGI.

The Ombudsman had alleged that Sherwin was an executive vice president of WGI when the offense was allegedly committed.

It said that the LWUA purchased ESBI’s majority shares without the necessary approval of the Monetary Board (MB) of the Bangko Sentral ng Pilipinas, Department of Finance (DOF) and the Office of the President (OP).

The Ombudsman further said that LWUA acquired ESBI despite findings by an independent audit firm showing that the bank was suffering from financial losses and capital deficits for five straight years from 2005 to 2009. 

Instead of cancelling the acquisition deal, the Ombudsman said, Pichay and the other members of the Board approved the transfer of almost P700 million of LWUA funds to ESBI supposedly to increase the bank’s authorized capital stock.

The Ombudsman said the fund transfer was again made without the required approval of the BSP’s Monetary Board.

The Ombudsman said the majority shares purchased by LWUA are now deemed “worthless” as the BSP’s Monetary Board has already placed the ESBI under “receivership” status due to its inability to pay its liabilities and to operate without incurring losses.

Pichay and Gatchalian have earlier dismissed the charges as “baseless” and “politically motivated”, maintaining the acquisition deal was above board.

Gatchalian had said that he had never been involved in the management or day-to-day operations of the bank, including the negotiations regarding the P80-million acquisition deal.

"My only involvement with ESBI was my ownership of 14 shares of stock, representing a measly 0.00001886062 percent of the total shareholdings sold to LWUA," Gatchalian said, adding he only received P2,514.82 from the sale of shares. —with Virgil Lopez/KBK, GMA News