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De los Angeles waives bank secrecy right

Legacy bribed SEC official—witness

By Angie M. Rosales

03/10/2009

A ranking Securities and Exchange Commission (SEC) is in hot water after he was exposed by the two latest Senate witnesses in the ongoing inquiry of the Legacy Group of Companies as the alleged “beneficiary” of a house and lot and a pricey SUV from the companies ran by businessman and town mayor, Celso de los Angeles.

The receipt of the alleged properties came two years after De los Angeles’ companies were found by both SEC and Bangko Sentral ng Pilipinas as “financially distressed.”

Besides having alleged close ties De los Angeles enjoyed with SEC Commissioner Jesus Enrique Martinez, the former was claimed to be associated with Parañaque Rep. Eduardo Zialcita who in turn, was accused by the witnesses of having been the recipient of checks amounting to P1.8 million issued in 2006.

De los Angeles operated the Rural Bank of Parañaque until its dissolution last year. This is said to be among the banks that had engaged in the the dubious “double your money” scheme.

Zialcita and Martinez are second cousins, according to the SEC official himself.

Zialcita yesterday categorically denied any involvement, “in any capacity, official or unofficial, with the companies of the Legacy Group” of De los Angeles, stressing that he was never a consultant to them, and has never been consulted by them.

“I must also state that I have never been the recipient, personally, of checks or funds, from the companies that make up the Legacy. I condemn, in the strongest possible term, this

insidious attempt to besmirch my name and good reputation,” Zialcita said.

“The alleged use of my name on the records of the Legacy Group is appalling, and constitutes an insult of the highest order. It may be that my name was being used by this Group for their own purposes, as a foil against other high-profile personalities,” he added.

The congressman said he has asked his lawyers to prepare the necessary charges against those who have caused “untold anguish and grief to him and his family” over the issue.

Zialcita acknowledged that Angeles and his Group, in the past, have supported his programs in Paranaque, adding that the funds were by the way of donations voluntarily offered and freely given on behalf of the underprivileged families in Zialcita’s district.

Carolina Hinola and Namnama Pasetes-Santos yesterday disclosed information on the Legacy funds before the Senate, claiming that De los Angeles “maliciously and intentionally misused, converted and misappropriated the funds” of the Legacy Consolidated Plans Inc. “for his own benefit, to the damage and prejudice of the company and its plan holders.”

De los Angeles, however, agreed to waive his bank secrecy rights, in a bid to prove that no checks from Legacy went into his bank accounts.

De los Angeles was accused by the two witnesses as having juggled funds of the Legacy Group of companies to make it appear that investments were coming in when there was allegedly no actual cash infusion and had these funds cover his personal obligations that included salaries of his househelp, laundry, medicines, travels, publicities and election campaign expenses, estimated at P94.2 million of LCPI’s funds, witness Santos told senators.

On top of these expenses, at least P5 million was alleged to have been released by De Los Angeles’ company to cover for the acquisition of a house and lot in Parañaque supposedly given to Martinez, who turned it over as a “gift” to the SEC official’s son.

An Expedition was also supposedly received by Martinez, according to Hinola who served as president of LCPI until its closure last December.

Senate President Juan Ponce Enrile said: “I tell you Mr. Chairman, as far as I’m concerned…I think its about time that we call a spade a spade. If I were Commissioner Martinez, I will tender my resignation this afternoon. Honor dictates that you must at least tender that and leave it to the Chief Executive of the land whether to accept or not your resignation and please submit copy of your resignation to this committee.

“It’s about time that we should be harsh to people in government... there is a semblance of unfitness on your part to exercise your powers as commissioner of the SEC and if it becomes necessary for the Senate to express its sense of disgust over your conduct as a public functionary, I myself will file the necessary resolution in the Senate,” Enrile added.

Martinez said he is mulling resignation.

Both Hinola and Santos claimed De los Angeles is “well connected” with the SEC as he is a close friend of Martinez.

“From my interactions with both De Los Angeles and Martinez, I can say with reasonable certainty that Martinez is a close friend of De Los Angeles and he helped Legacy when the company had problems renewing its dealership license in 2008 due to some deficiencies,” Honila said.

“This is a matter often mentioned and boasted by De los Angeles in our meetings and I was able to confirm this on Feb. 14, 2006. I, together with Santos, met with Martinez for lunch at the Japanese restaurant in Shangrila Makati upon the instructions of De los Angeles who could not meet him due to prior commitment.

“Martinez asked if we have any problems with SEC that he could help us with and at that time, I informed him that we had none. He was at that time accompanied by Zialcita,” she said.

Hinola claimed that she had another encounter with Martinez, in Nov. 9, 2007 where she confessed to have “handed” over cash of P1.4 million “upon the instructions of De los Angeles.”

“Said money was personally received by Martinez. The money came from the RBSJ (Rural Bank of San Jose) and was supposed to be ‘payment’ to Martinez for the Expedition acquired by RBSJ,” she said. RBSJ is said to be Legacy-affiliated.

Also, Hinola said that Martinez called her up to follow up the payment by Legacy to the house and lot owned by a certain Michael Lirio, that was supposed to be the SEC official’s gift to his son.

“Legacy ended up buying the house and lot from Lirio; ownership of this house and lot was later on transferred to commissioner’s son,” she added.

She further told the committees three checks carrying P1 million each were issued by the company to the property that Martinez said amounted to P3.2 million.

Santos, however, issued an additional P2 million worth of check payable to Lirio, Hinola said.

Confronted by these revelations, Martinez told Senate probers indeed there was such a transaction that spanned from April to November last year with Lirio, but it was his son who paid for the said property located at Quendover Classic Homes in BF Homes Parañaque.

In queries made by senators, it was found out that the said property was initially placed under the name of De Los Angeles’ son, Martin Nicolo who is a member of Lecacy’s executive committee, before transferring it to the name of Martinez’ son.

Martinez told senators that his son had been renting the place from the younger De Los Angeles, a former commercial model like his daughter-in-law, for seven months before they decided to acquire it.

Senators also learned that another transaction took place between the sons of De Los Angeles and Martinez involving the Expedition.

The said vehicle was supposedly acquired by RBSJ from Spin Management Corp. a buy-and-sell company of Martinez’ son, which up to this day is yet to be issued with a deed of sale.

In pursuing the apparent implications of Martinez’ involvement in the Legacy mess, Enrile found that the SEC official handles the agency’s oversight committee in charge of non-traditional securities that include pre-need plans, receives the memorandums concerning pre-need companies subject to resolution by the committee en banc.

“In case of Legacy, all of your decisions pass through Martinez?” the Senate chief said in asking SEC officer-in-charge for non-traditional securities and instruments department Jose Aquino who admitted having the embattled official as his immediate superior.

“The memo addressed to the en banc passes through us, the oversight committee of the different departments, it comes to me so that I am aware that it is presented to en banc,” Martinez said.

“What is the purpose of you putting ‘okay’ in it?” asked Enrile.

“So that I am aware,” replied the SEC official.

SEC chairman Fe Barin flatly told the committee that it was the first time that they’ve heard this information, adding that they will conduct an investigation similar to what is being carried out by the Senate committees while admitting that their current priority at the moment is the completion of the documentary requirements called to be submitted before the House of Representatives that is also looking into the case.

Santos, who served as chief finance officer of LCPI, made the disclosure on the use of Legacy funds for purported personal use of De Los Angeles, one of which was the issuance of checks “in the name of the good congressman”, whom she referred to as Zialcita.

“Various amounts were disbursed as per request of De los Angeles through his secretary Madelaine Cobbarubias as consultancy fee for Zialcita,” Santos said, adding that she issued a total of 18 checks for the alleged P1.8 million that the lawmaker received in tranches.

“He maneuvered the funds of LCPI, Legacy Motors and Legacy Cards by dictating when and where the funds should go over and above my futile objections. In numerous occasions, I resisted and at times, directly confronted him but to no avail. Whenever faced with resistance, he would shut me off by telling me ‘is this your company?’ ‘ I own this company’ ‘You should sign this because you are the finance officer’,” she narrated.

Santos said she was allegedly made to draw from LCPI’s funds P38 million for election-related purposes. This was supposedly when De Los Angeles who is currently mayor of Sto. Domingo town in Albay, was still seeking the local seat in 2007.

Hinola corroborated this claim saying that Legacy was made to pay, using its trust fund for plan holders, for a property in Cebu City called Punta Engaño in 2005 at P25 million but was supposedly appraised only at P13.6 million.

In the same proceedings, Enrile yesterday directed Barin, as well as other concerned government agencies, to cause the attachment of the properties and assets of De Los Angeles, including his P200-million house and lot in Alabang.

Describing the Legacy scandal as a “cancerous growth” which needs to be excised, Enrile told Barin that palliative measures against Legacy would no longer do, stressing the need for the group’s assets to be secured by the SEC so that claimants against Legacy can draw from them in the future.