Press Release
October 6, 2011

Blue Ribbon to investigate Ongpin's controversial behest loans

On 7 October 2011, the Senate Committee on Accountability of Public Officers and Investigations (BLUE RIBBON), chaired by Senator Teofisto "TG" Guingona, will conduct a hearing in the Senate on the alleged large scale financial transactions involving behest loans extended by the DBP to different private companies reportedly connected to Mr. Roberto Ongpin.

Sen. Guingona said that the Committee will investigate to determine possible amendments, not only on banking laws, but especially on the charters of Development Bank of the Philippines (DBP), Land Bank and other government financial institutions.

Last 5 August 2011, DBP Chairman Jose Nuñez and President Francisco del Rosario Jr. filed criminal and administrative cases against DBP's past Board of Directors led by President Reynaldo David, in connection with the alleged P660 million behest loans that the bank granted to Ongpin's company, Delta Ventures Resources Inc. (DVRI), to finance the latter's acquisition of Philex Mining shares that were subsequently sold at an astonishingly high price.

The Committee will require the appearance of Ongpin, former DBP board members led by David, and several bank officials to shed light on the circumstances surrounding the approval of these highly questionable loan transactions.

Aside from possible violations of banking laws, the Committee will also inquire into the possible insider trading and violation of Securities Code because the half- billion peso loans granted to Ongpin were used to buy DBP's 50 million shares in Philex Mining Corporation at P12.75 per share and subsequently sold to the group of Manuel Pangilinan at P21.00 per share, or more than triple the purchase price. At the time of the sale, Ongpin and David were also both Directors of Philex.

The Committee hearing also aims to determine the involvement of businessman Roberto Ongpin, who was then a Director of Philex Mining, and his closeness with former First Gentleman Jose Miguel Arroyo.

Sen. Guingona said that they need to determine the possibility that Arroyo had a hand in the loan transactions.

Other questions expected to be answered during the scheduled Committee hearings are as follows: Why did DBP, as the seller, agree to receive credit instead of outright cash?; Why was Golden Media added as third party in what could have just been a straight and simple loan transaction between two entities, DBP and DVRI?; Was the bank unduly exposed to any risk and did DBP violate any banking rule or favor a borrower to the detriment of the bank's depositors and the taxpayers?

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