‘Gov’t to lose P1-B coco levy funds’

The Philippine Star - - NEWS - – Edu Punay

The gov­ern­ment stands to lose P1 bil­lion in co­conut levy funds to a pri­vate firm due to a rul­ing of the Supreme Court (SC) that voided a mort­gage with the state-con­trolled United Co­conut Planters Bank (UCPB), a for­mer bank ex­ec­u­tive warned yes­ter­day.

Je­sus Ar­ranza, a for­mer board mem­ber of UCPB who re­mains a stock­holder in the bank, said a 2017 de­ci­sion of the third divi­sion of the SC cost UCPB about P1 bil­lion in funds that are sup­posed to ben­e­fit co­conut farm­ers in the coun­try pur­suant to pre­vi­ous de­ci­sions of the court.

Ar­ranza, also chairman of the Fed­er­a­tion of Philip­pine In­dus­tries and for­mer pres­i­dent of the United Co­conut As­so­ci­a­tion of the Philip­pines, urged the SC to set aside the rul­ing on the case in­volv­ing the mort­gage of Revere Realty and Devel­op­ment Corp. owned by busi­ness­man Jose Go in UCPB over prop­er­ties in Lu­cena City be­long­ing to a cou­ple with whom he had a joint ven­ture that fiz­zled out.

“While the gov­ern­ment is now the owner of the ma­jor­ity of the out­stand­ing shares of stocks of UCPB, which have been con­sid­ered part of the so-called co­conut levy fund, it must be stressed that (the SC) had also di­rected that the same should be uti­lized for the ben­e­fit of the co­conut farm­ers and the devel­op­ment of the co­conut in­dus­try. What­ever ac­tion the (SC) will take in this case will def­i­nitely im­pact on the co­conut farm­ers and the co­conut in­dus­try, in par­tic­u­lar, and the gov­ern­ment, in gen­eral,” he stressed in a five-page let­ter ad­dressed to all jus­tices of SC.

Ar­ranza pointed to al­leged “ir­reg­u­lar­i­ties” in the rul­ing, be­liev­ing that the third divi­sion might have vi­o­lated the SC’s in­ter­nal rules in re­solv­ing the case in­volv­ing Lu­cena Grand Cen­tral Ter­mi­nal Inc. (LGCTI).

Ar­ranza claimed that three jus­tices – now Om­buds­man Sa­muel Mar­tires, now re­tired Noel Ti­jam and Alexan­der Ges­mundo – voted to con­cur with the as­sailed de­ci­sion even af­ter only two to three days since they were des­ig­nated to the third divi­sion.

“How could the three above-named jus­tices of the third divi­sion (Ges­mundo, Mar­tires and Ti­jam) have ad­e­quately stud­ied the cases (which I un­der­stand al­ready con­sists of around 2,000 pages) only for a pe­riod of two or three days, be­fore the de­ci­sion dated Aug. 16, 2017 was pro­mul­gated?” he asked.

Ar­ranza cited in­ter­nal rules of the SC, which re­quire the writer of the de­ci­sion to pre­pare the draft de­ci­sion and send to the other jus­tices at least seven days be­fore vot­ing.

“It is likely that this rule was not com­plied with as the said three jus­tices be­came mem­bers of the third divi­sion only two or three days be­fore the de­ci­sion dated Aug. 16, 2017 was is­sued,” he al­leged.

The UCPB stock­holder asked the SC to cor­rect the in­fir­mity as he also called for res­o­lu­tion of the mo­tions for re­con­sid­er­a­tion and to el­e­vate the case to the full court.

“If an ir­reg­u­lar­ity in­deed at­tended the pro­mul­ga­tion of the said de­ci­sion, it is rather dif­fi­cult to ex­pect the same mem­bers of the third divi­sion who signed the de­ci­sion to re­verse them­selves and/or in the process, ex­pose the ir­reg­u­lar­ity com­mit­ted,” Ar­ranza added.

The SC third divi­sion had re­versed the Court of Ap­peals’ March 2014 rul­ing that af­firmed the UCPB mort­gage of Revere over the prop­erty of spouses Felix and Car­men Chua.

In 1997, Go and the Chuas had en­tered into a joint ven­ture to de­velop the 44-hectare prop­erty in Ilayang Du­pay into a sub­di­vi­sion but it did not push through. Still, sev­eral deeds of ab­so­lute sale were ex­e­cuted putting the lands in Revere’s name to hold in trust for the Chuas.

Mean­while, the Chuas ex­e­cuted a mort­gage with UCPB to se­cure their per­sonal loans and cor­po­rate obli­ga­tions for LGCTI.

Un­known to the Chuas, Go and Revere took out a mort­gage over the prop­er­ties. When the land was fore­closed, the Chuas were prompted to ask UCPB to ap­ply the pro­ceeds only to their obli­ga­tions and not Go’s, but the bank did not heed the re­quest.

The SC agreed with the Chuas that they had not con­sented to Go’s mort­gage over the land, which they still owned.

The SC said UCPB should have ex­er­cised greater care in han­dling the mort­gages and de­ter­mined the real own­er­ship of the prop­er­ties.

The SC added that the CA’s up­hold­ing of the Go mort­gage meant the Chuas would still be left with P68 mil­lion in li­a­bil­i­ties since the fore­clo­sure pro­ceeds could not be en­tirely ap­plied against their obli­ga­tions.

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