THE Department of Justice (DOJ) has ordered the filing of criminal charges against an official of the Standard Chartered Bank (SCB) for making allegedly making false assertions in court, which deliberately withheld that it had obtained collateral for its loan to a local firm.
In an 18-page resolution dated Sept. 16 but was released to the media recently, it ruled there is probable cause for the filing of perjury case against Kathrina Sebastian, a senior SCB official who was the subject of a complaint filed in December by the Philippine Investment Two Inc. (PI Two).
The case was originally filed before the Makati City Prosecutor’s office but Justice Secretary Leila de Lima has issued a Department Order for the transfer of the said case with the Justice department.
The Resolution was investigated and signed by Prosecution lawyer Caterina Isabel Caeg and was approved by Senior Deputy State Prosecutor Richard Anthony Fadullon.
“After a careful examination of the evidence on record, the undersigned finds probable cause to indict respondent Sebastian for perjury under Article 183 of the Revised Penal Code for willfully and deliberately making the following false statement in SCB’s Comment on the Petition: “the fact that Philippine Investment Two was not able to furnish adequate guarantees or security in exchange for the inadequate LBHI [Lehman Brothers Holdings Inc.] guaranty.”
The DOJ opined that Sebastian deliberately withheld the fact that SCB had already received more than enough collateral for a loan that it gave to PI Two, thus adversely affecting the firm and its other creditors.
SCB in 2007 lent P819 million to PI Two, the former unit of the defunct US investment firm LBHI. After LBHI filed for bankruptcy in New York in 2008, Judge Cesar Untalan of the Makati Regional Trial Court (RTC) Branch 149 became the rehabilitation court to ensure payment of PI Two’s debts to creditors.
But PI Two and another creditor Metrobank filed urgent court petitions against SCB upon discovering that SCB had received some $90 million in bonds as collateral from LBHI, and was negotiating a settlement in New York for the same loan that it was already being paid for under PI Two’s local rehabilitation plan. In effect, they said SCB was seeking payment twice for the same loan, here and in New York.
On August 30, Untalan ordered SCB to return P233.6 million to PI Two upon finding that SCB had already signed a settlement agreement in New York for the entire P819-million loan. SCB sold the $90 million in bonds, and returned the $64 million in excess proceeds to LBHI.
“Respondent Sebastian’s deliberate concealment of the existence of the Pledge Agreement with [$90 million] collaterals allowed her to willfully and falsely declare in SCB’s Comment on the Petition that the Guarantee securing complainant PI Two’s loan is inadequate.”
It added that SCB’s failure to divulge the collateral had prejudiced PI Two and its other creditors: “Respondent Sebastian’s unqualified declaration that the Guarantee is inadequate coupled with her concealment of the existence of the Pledge Agreement with collaterals which further secures the Guarantee deprived the Rehabilitation Court of making an informed evaluation and assessment.