BDO at a loss on how to dispose of P1.1-B Jose Velarde account

MANILA, Philippines - Commercial bank Banco de Oro on Wednesday sought guidance from the Sandiganbayan Special Division on how to dispose of the P1.1 billion Jose Velarde assets in its custody, in light of conflicting claims by the Bureau of Internal Revenue and the Wellex Group Inc. BDO lawyers Carlos Buenaventura and Corazon Leynes Xavier admitted is unsure on how to comply with the Sandiganbayan's order to turnover the Velarde assets for the satisfaction of the forfeiture of ill-gotten wealth of former President Joseph Estrada particularly. The BIR insists that its distraint or freeze order over the same property remains in effect. "The bank is uncertain as to the status, effects and consequence of the BIR distraint on the IMA (investment management account) account vis-à-vis the notice of garnishment of September 2002 and cannot determine without hazard to itself to which office it shall deliver the assets of the IMA account at the opportune time," Buenaventura and Xavier said. The Velarde assets consist of collateral shares and trust investment entrusted to the bank as security for a P500 million loan drawn by Wellex owner William Gatchalian. In its verdict, the Sandiganbayan said the assets, which according to BDO now amounts to a combined value of around P1.1 billion, were part of Estrada’s ill-gotten wealth and may be forfeited in favor of the government. Estrada has consistently denied that he is not Jose Velarde, saying the secret account was actually owned by businessman Jaime Dichaves. But in a letter dated January 21, 2008, lawyer Lamberto Mercado, Wellex vice president for legal affairs, said Wellex has already paid the loan "not to the bank as investment manager but instead directly to the owner of the account." Mercado however did not disclose the identity of the account owner, even as he stressed that "the loan obligation has apparently been extinguished." BDO clarified that it is not a party in the plunder case and "has no claim or legal interest whatsoever" in the account, although it intends to comply with the court order. "Prompted by caution and prudence, the Bank seeks the guidance of the Honorable Court on how to further proceed with the disposition of the subject IMA account in view of the prior lien of the BIR and the claim of the Wellex Group Inc.," the bank lawyers said. - GMANews.TV