One year after an obscure trading firm left a trail of debts, who is laughing his way to the bank?

can always get a court order,” he said. However, in this case, he said it is the NBI which should get the court order, being the one handling the criminal case against the Bancap off icers.

This also goes for the garnishment or freezing of deposits of source said the agency was informed of last-minute efforts of relatives of the Bancap off icers to withdraw from the P1.5-million time deposit account of Ms. Nite in the Rural Bank of Parañaque. But then, Bank of Commerce was able to apply for garnishment of the assets on account of its claims from Bancap.

The rights provided by the Secrecy Law can also be waived with the consent of the depositor or investor. Alberto Reyes, managing director of the Bangko Sentral’s supervision and examination services sector, said in this case, even if Bancap may probably no longer enjoy these rights, the central bank would still have to ask for a waiver from all the parties involved in the transactions, which can be a tedious process.

Mr. Reyes admitted that the provision is a “major constraint” to the full performance of the examiners’ functions. “We are not even allowed to see whom the checks were payable to. We can see only the overall report on the inventory of checks outstanding as of that day,” he said. “That was how we were alerted on the unusually huge amounts of checks at Bank of Commerce.”

On April 22, 1994, Bancommerce bounced several incoming checks worth P500 million from Bancap payable to two investment houses. The incident was widely acknowledged in banking circles as the “triggering mechanism” for the whole pyramid of Bancap- related transactions to collapse.

However, sifting through the debris of the scam by following the T-bill trail may be a Herculean task. Nearly everybody in the financial industry believes the money is just around, but in whose hands, no one knows.

Except, perhaps, for Bancommerce. Having served as Bancap’s “clearing bank,” Bancommerce must have in its possession records of checks drawn against Bancap’s deposit account. The inventory, verified against that of the counterparty, should be able to answer: Who did Bancap pay? Who pocketed the money? Why?

The inventory should also explain why certain checks were issued by Bancap to some institutions. According to well- placed sources, the checks Bancommerce refused to honor on April 22, 1994 were drawn by Bancap in favor of Exchange Capital Corp. (ExCap) and Capital One Equities Corp. If these were for the purchase of T-bills, how was ExCap able to close its position as early as April 4 when three checks worth P300 million bounced 18 days later?

Another check drawn by Bancap amounting to P5 million was made payable to ExCap trader Julius Yan, the sources said. The check was reportedly later “negotiated” by Majalco Finance and Investment Corp. Majalco is an investment house owned by George Martirez, which put up an investment house called Unicapital, Inc. a month after the Bancap scam broke out. The subsidiary is a joint venture with Menardo Jimenez and Gilberto Duavit of the GMA-7 Group. BusinessWorld tried to reach Mr. Martirez, but was told he was in the United States and will be back next month.

If there is anything that the recipients of the checks — ExCap, Capital One and Majalco — shared in common, it was Bancap.

A joint audit by SEC and the Bangko Sentral on 28 investment houses to determine if there were direct losses as a result of the scam reveals Bancap transactions were merely confined to the three. Mr. Reyes of the Bangko Sentral’s supervision and examination services sector confirmed this. While all three were able to close their exposures to Bancap, it was only Capital One which was not agile enough to close its position with other institutions, the SEC source said.

Quite interestingly, the triumvirate all experienced personnel movements after the scam. BusinessWorld learned Sandy Tendero, who was identified by Bancap trader Vicky Magalona- Escalambre as her “contact” in Majalco, has already been dismissed. In Capital One’s case, Edwin Fernandez, who used to be the firm’s chief executive officer, said he and his treasury people resigned en masse “for delicadeza’s sake.” In ExCap’s case, it outrightly fired two of its traders and closed its entire trading unit.

But the bigger mystery is one for the books. Bancap was supposed to have ceased operations on May 4, 1994, but it appears it retains current accounts with some banks and continues to receive payments in its deposit account. BusinessWorld obtained photocopies of four cross checks payable to Bancap in the amount of P272,000 each.

The signatories were: Julius Yan, who issued two checks dated February 11, 1995 and March 9, 1995 drawn against his own personal account at Security Bank’s branch located on the ground floor of ExCap’s office building; Edna Garrovillas, who issued one check dated March 9, 1995 drawn against her personal account at the same bank; and Flora L. Gawaran, who issued one check dated February 11, 1995 drawn against an account number at Metropolitan Bank and Trust Co.’s Ayala-Alabang Branch, Dona Marta Building.

Mr. Yan is the trader fired from ExCap for his alleged “unauthorized deals” with Bancap. Ms. Garrovillas used to be ExCap’s comptroller and signatory to the company’s checks, and remains with Mr. Virata’s group. In an interview, Mr. Virata said ExCap found her “clean.” As for Ms. Gawaran, BusinessWorld learned she served as ExCap’s accountant before she was fired along with Mr. Yan.

A Bancap employee who was in- charge of loans and transactions and who requested anonymity told BusinessWorld she has never heard of Ms. Garrovillas and Ms. Gawaran, much less seen checks being paid to Bancap by them.

Some questions just beg to be asked. Why do these ExCap people have to pay Bancap? And why do they have to pay Bancap when it should no longer be in existence? If they also made T-bill placements and are paying off the maturities, why would they still choose to honor an agreement with a company that has already ceased operations? And who is negotiating the checks? Who is getting paid?

One year after an obscure trading firm left a trail of debts, who is laughing his way to the bank?