BusinessMirror - - Front Page - By Ty­rone Jasper C. Piad & Joel R. San Juan

THE Philip­pine fi­nan­cial sys­tem re­mains sta­ble amid the Wire­card mess in­volv­ing two lo­cal bank­ing giants, the Bankers As­so­ci­a­tion of the Philippine­s (BAP) guar­an­teed on Tues­day. The bankers’ group “as­sures the pub­lic that the coun­try’s fi­nan­cial sys­tem is sound and that very strict rules re­gard­ing the is­suance of bank cer­ti­fi­ca­tions are in place.” While these doc­u­ments may be forged or fal­si­fied, the BAP said their au­then­tic­ity could be as­cer­tained through metic­u­lous ver­i­fi­ca­tion pro­cesses con­ducted by ap­pro­pri­ate in­sti­tu­tions. The BAP en­cour­aged the pub­lic to have their bank cer­ti­fi­ca­tions and doc­u­ments from third par­ties be val­i­dated by the is­su­ing bank to prac­tice due dili­gence. The BAP’S clean bill of health for the bank­ing sys­tem came as the Depart­ment of Jus­tice said the Filipino banker whose law firm had been tied to Wire­card has re­ported re­ceiv­ing death threats. The DOJ ear­lier or­dered the Na­tional Bureau of In­ves­ti­ga­tion (NBI) to in­ves­ti­gate. Mean­while, the BAP said it was work­ing with reg­u­la­tors to im­prove the bank­ing in­dus­try’s sys­tem. “We con­tinue to work with the Bangko Sen­tral ng Pilip­inas [BSP] and other govern­ment agen­cies to im­prove our pro­cesses, and our mem­ber banks are reg­u­larly and proac­tively strength­en­ing se­cu­rity checks and sys­tems to en­sure in­tegrity at ev­ery level,” the BAP said. The names of two of the coun­try’s big­gest banks—bdo Uni­bank Inc. and Bank of the Philip­pine Is­lands (Bpi)—were re­cently dragged into the fray after an ac­count­ing scan­dal in­volv­ing the Ger­man fi­nan­cial tech­nol­ogy firm Wire­card broke, but both banks de­nied Wire­card is a client. The cri­sis erupted after Wire­card AG’S au­di­tor, Ernst & Young, de­clined to ap­prove the com­pany’s 2019 ac­counts after find­ing out that $2.1-bil­lion worth of funds were miss­ing. This prompted Markus Braun to im­me­di­ately leave his po­si­tion as the com­pany’s chief ex­ec­u­tive officer. Trac­ing the as­sets led to the al­le­ga­tions that BDO and BPI were hold­ing the miss­ing amount. Both banks de­nied such claims right away, stress­ing that the doc­u­ments sup­port­ing the al­le­ga­tions were fal­si­fied. BPI and BDO said Wire­card was not even their client in the first place. Both banks have taken ac­tion against the em­ploy­ees in­volved in the fal­si­fi­ca­tion of doc­u­ments.

The Cen­tral Bank also clar­i­fied that none of the al­leged miss­ing funds en­tered the Philip­pine bank­ing sys­tem.

Wire­card, mean­while, said that fur­ther as­sess­ment of the case in­di­cates the miss­ing $2.1 bil­lion likely never ex­isted to be­gin with. The Ger­man firm has since hired in­vest­ment bank Houli­han Lokey to iron out a new fi­nanc­ing strat­egy to keep clien­tele.

Probe in Manila

IN Manila, the Depart­ment of Jus­tice or­dered the Na­tional Bureau of In­ves­ti­ga­tion, the Bureau of Im­mi­gra­tion and the Anti-money Laun­der­ing Coun­cil to look into the Wire­card con­tro­versy.

This, as for­mer Wire­card chief op­er­at­ing officer Jan Marsalek re­port­edly stayed for a few days in the Philippine­s in March prior to the is­sues re­gard­ing ac­count­ing ir­reg­u­lar­i­ties sur­faced.

Marsalek was the officer in charge of over­see­ing South­east Asian op­er­a­tions.

BDO is lead­ing the bank­ing sec­tor in terms of as­sets and cap­i­tal base, which amount to P3.29 tril­lion and P372.22 bil­lion, re­spec­tively, as of end-march. In the same pe­riod, BPI’S to­tal as­sets reached P2.19 tril­lion, while its cap­i­tal ac­count stood at P276.13 bil­lion.

In the first quar­ter, BDO re­ported that its net earn­ings de­clined by 10.20 per­cent to P8.8 bil­lion, while BPI saw its prof­its dip by 5 per­cent to P6.39 bil­lion amid the pan­demic.

Shares in BDO surged 4.26 per­cent on Tues­day to fin­ish at P98, while BPI saw its stocks in­crease by 3.6 per­cent to end at P72 amid the 1.68-per­cent uptick for the bench­mark in­dex.

Death threats

JUS­TICE Sec­re­tary Me­nardo Gue­varra on Tues­day dis­closed that lawyer Mark To­lentino has been re­ceiv­ing death threats after his name was dragged into the scan­dal.

Gue­varra said To­lentino and his lawyer Den­nis Manalo went to the NBI on Monday to shed light on his al­leged role on the is­sue.

“At­tor­ney To­lentino said he was hired by his prin­ci­pal early this year to pro­vide con­sul­tancy ser­vices, he un­der­took to sub­mit a for­mal af­fi­davit to the NBI. He said he is re­ceiv­ing death threats,” Gue­varra told re­porters on Tues­day.

The NBI is un­der the di­rect su­per­vi­sion of the DOJ.

To­lentino is a for­mer as­sis­tant sec­re­tary for the Depart­ment of Trans­porta­tion who was sacked by President Duterte in 2018.

He is be­ing linked to the scan­dal fol­low­ing ad­mis­sion that his law firm, M.K. To­lentino Law & Busi­ness Con­sul­tancy Of­fice, has for­eign cur­rency de­posit ac­counts with BDO and BPI but that it did not name its clients, cit­ing ab­so­lute con­fi­den­tial­ity re­quired by the For­eign Cur­rency De­posit Act.

To­lentino’s camp de­nied know­ing or par­tic­i­pat­ing “in any al­leged ir­reg­u­lar­ity” in­volv­ing Wire­card’s money.

But, BSP Gov­er­nor Ben­jamin Dio­kno claimed that those be­hind the anom­aly are only us­ing the names of BPI and BDO to cover their tracks as ini­tial re­ports showed none of the miss­ing $2.1 bil­lion en­tered the Philip­pine fi­nan­cial sys­tem.

Gue­varra ear­lier di­rected the NBI to in­ves­ti­gate cer­tain in­di­vid­u­als who have been linked in the scan­dal.

He also re­ported that Wire­card’s COO Marsalek was in the coun­try on March 3, 2020, and left after two days based on the records of the Bureau of Im­mi­gra­tion.

Marsalek, who was in charge of over­see­ing daily op­er­a­tions of the com­pany in South­east Asia, has re­port­edly been fired from his po­si­tion and is be­ing blamed for the fi­nan­cial mess.

Gue­varra also or­dered the NBI to co­or­di­nate with the AMLC de­spite BSP’S ear­lier pro­nounce­ment that the miss­ing money of Wire­card did not en­ter the Philippine­s.

He said the NBI and AMLC would work to­gether in look­ing into money-laun­der­ing in­di­ca­tions in­volv­ing the miss­ing Wire­card funds.

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