OVER the objections of government prosecutors, the Sandiganbayan granted the motion of former Local Water Utilities Administration (LWUA) board chairman and now Surigao del Sur Rep. Prospero Pichay for the issuance of subpoena on the Philippine Deposit Insurance Corporation (PDIC).
In a resolution dated September 6, 2019, the Fourth Division ordered the clerk of court to issue a subpoena duces tecum on the PDIC-Legal Department requiring it to present and produce all documents pertaining to the Express Savings Bank Inc. (ESBI).
Pichay is facing charges of graft and violation of the Manual of Regulation for Banks (MORB) in relation to RA 7653 or the New Central Bank Law.
Prosecutors said he acted in conspiracy with former LWUA trustee Enrique Senen Montilla III and management executive Wilfredo Feleo Jr. over the alleged anomalous acquisition of a 60-percent stake in ESBI for P80 million in 2009.
The Office of the Ombudsman said the transaction was attended by fraud as it was approved without being cleared by the Office of the President, the Department of Finance, and the Monetary Board of the Bangko Sentral ng Pilipinas.
It also noted that at the time of acquisition, ESBI was insolvent and has been incurring losses in its operations.
Also questioned was the deposit of P300 million of LWUA’s funds into the bank and an advanced payment for stock subscription in ESBI amounting to P400 million. The bank went into receivership in 2011 resulting in alleged losses to LWUA.
Pichay has denied any wrongdoing, saying the bank was a good investment as shown by its P70 million earnings posted in 2010 and 2011.
He has also claimed to have proof that the Bangko Sentral ng Pilipinas gave the transaction its imprimatur through a letter recommending the acquisition.
In his motion, the lawmaker insisted that the documents under the custody of the PDIC are relevant to his defense.
Countering the prosecution’s objection that the PDIC documents were not mentioned during pre-trial, Pichay said he made reservations in the Joint Stipulation of Facts and Issues that he intends to mark certain documents and certifications from the PDIC.
Specifically, the papers PDIC is being asked to bring to court pertain to the LWUA’s P300 million deposit with the ESBI and the capital infusion of P400 million in the form of advance payment for stock subscription in the bank.