14 DBP execs face graft over anomalous sale of gov’t securities

Fourteen key officials of the Development Bank of the Philippines (DBP) were charged yesterday with graft and corruption before the Office of the Ombudsman for their alleged involvement in the anomalous sale of government securities (GS) worth more than billion to a private entity.

Among those charged were DBP chairman Jose A. Nunez Jr. and president Gil A. Buenaventura.

Also included in the charged sheet were Alberto Aldaba Lim, Jose Luis L. Vera, Vaughn F. Montes, Lydia B. Echauz, Reynaldo G. Geronimo, Cecilio B. Lorenzo, Daniel Y. Laogan, Fe Susan G. Prado, Fritzie P. Tangkia-Fabricante, Mariquita L. Agena, Rustum H. Corpuz, and Francis J. Delos Reyes.

The DBP Employees Union (DPEU) headed by its president Rudelito L. Tirado Jr. and the Association of DBP Career Officials (ADCO), led by Francis Romulo I. Badilla Jr., filed the case. They told mediamen that the respondents allegedly violated the Anti-Graft and Corrupt Practices Act, the Securities Regulation Code, and Bangko Sentral ng Pilipinas (BSP) rules.

The accusation stemmed from DBP’s alleged illegal sale of billion worth of GS to a private counterparty, which resulted in actual losses to the government of million.

The complainant said “the losses caused the net income of the bank to drop significantly from billion posted in 2013 to billion last year.”

Citing a COA report, the complainants stated that the DBP’s treasury group sold GS at various dates starting in January last year to First Metro Investment Corporation (FMIC), with the same GS series purchased by DBP on the same day at the same price from FMIC.

Allegedly, officials and senior management officials did it despite knowledge that such kind of transactions described as a “wash sale” is prohibited by the BSP. This is considered unsound trading practices that lead to market manipulation.

The complainants said COA recorded 28 wash sale transactions between DBP and FMIC, recorded and effected through the Philippine Dealing Exchange System (PDEx). Concerned officials of PDEx were the ones who exposed and reported the transactions to the BSP.

DPEU and ADCO said the alleged wash sale caused irreparable injury to the government, acts penalized under Republic Act 3019.