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THE
Bangko Sentral ng Pilipinas (BSP) is set to penalize the
Rizal Commercial Banking Corp.-Trust and Investment
Division (RCBC-TID) for “lack of prudence in the
management of the trust fund of Pacific Plans Inc. (PPI).”
Both
RCBC and PPI are part of the Yuchengco Group of
Companies.
The
central bank, however, did not include the amount of the
fine in its resolution.
The BSP
acted on the complaint lodged by the Parents Enabling
Parents Coalition Inc. (PEP Coalition) on the alleged
acts and omission of RCBC-TID with respect to its
handling of PPI’s trust fund. PEP Coalition filed the
complaint on August 26, 2005.
Besides
imposing the monetary penalty, the BSP, in its
Resolution 574 dated May 17, 2007, likewise warned RCBC
and the RCBC-TID “that commission in the future of
similar acts on lack of prudence in the management of
trust funds as required under Section X401 of the Manual
of Regulations for Banks shall subject the bank to
stiffer sanctions.”
Vic
Ortuoste, PEP Coalition’s head for its finance
committee, said the BSP’s findings confirmed PEP’s
charges on the alleged collusion among RCBC, PPI and the
Yuchengcos.
“This is
a vindication for us,” he said in a news conference on
Tuesday.
The
coalition criticized RCBC-TID for, among others, heavily
investing the trust fund in losing stocks, which in 2002
suffered the highest book loss of P631 million.
“Other
equity investments were made in corporations primarily
because these were owned in whole or in part by the
Yuchengco Group and not because it would benefit the
plan holders’ trust fund or PPI. More than P140 million
were invested in these related companies,” the coalition
added.
RCBC,
for its part, welcomed the BSP resolution. “While we
differ with the resolution of BSP, we emphasize that BSP
has not made any findings of ‘mismanagement’ by RCBC-Trust.
In particular, there were no findings of mismanagement
with respect to any allegation contained in the
complaint of the coalition,” said corporate secretary
and legal counsel Macel Fernandez-Estavillo.
PPI
deputy legal counsel Felix Desiderio Jr., in a separate
statement, said the company maintains the soundness of
the PPI placements in RCBC-Trust. “We wish to point out
that the root cause of the PPI illiquidity problem is
the deregulation of tuition fees which resulted in the
skyrocketing of school fees by more than 50 percent in
the 1990s.”
With BSP
resolution now on hand, the PEP Coalition hopes that the
Securities and Exchange Commission will do appropriate
action on certain issues referred to them by the BSP.
Among
these issues are investment in equities and loans in
excess of the prescribed limits; violation of Rule 20.2
of the New Pre-Need Rules; proprietary of the
consolidation of the educational trust funds
(traditional and fixed value) in September 2001;
investment in Napocor bonds not in accordance with SEC
approval; and nonsubmission of the monthly investment
activity report-summary of transactions schedule.
“A
commissioner informed us that the SEC will wait for the
ruling of the BSP concerning the management of the trust
fund. After almost two years, the BSP came out with a
decision. We hope that the SEC will now act
accordingly,” the coalition said.
PPI has
petitioned the court to allow its rehabilitation but the
appeal has yet to be approved. |
