This is why 140,000 depositors are now suffering, due to the criminal acts of Mr. Celso delos Angeles, owner of Legacy banks and now lives off his life with billions stashed in other banks."Legacy owner siphoned billions, says BSP"
By Gil C. Cabacungan Jr.Philippine Daily InquirerFirst Posted 23:47:00 02/23/2009Filed Under: Banking, Financially Distressed Companies
The central bank, Bangko Sentral n Pilipinas (BSP), Monday accused Celso de los Angeles Jr., founder of the Legacy group, of siphoning billions of pesos in deposits from 12 now-shuttered rural banks of the group through fictitious loans, ghost motorcycle and car sales, and overpriced properties.BSP supervision and examination department head Chuchi Fonacier told members of the House committee on banks and financial intermediaries how De los Angeles eluded regulators by juggling funds between the rural banks and non-bank companies and how he ran the Legacy group through dummy nominees and trusted lieutenants in key management positions.“From day one, Celso de los Angeles had intended to have PDIC [Philippine Deposit Insurance Corp.] answer for the deposits he had siphoned off should the Legacy banks fail,” Fonacier said.The BSP said it would file charges against De los Angeles within the week.Fonacier said De los Angeles initially lured depositors and investors by offering double-your-money schemes with yields of 34 percent and 74 percent for three and five year terms, respectively, with one-year interest paid in monthly checks. This resulted in a 44-percent jump in deposits for Legacy from 2006 to 2008, compared with 6-8 percent growth rates in other banks, he said.Legacy also deployed agents to offer loans for motorcycles and cars sold by Legacy Motors with a commission of one to 10 percent, Fonacier said.De los Angeles explained that Legacy offered to charge drivers P100 a day, or less than the P150-a-day boundary they paid tricycle operators. He claimed he was in a joint venture with a Chinese motorcycle maker who supplied him with affordable motorbikes.Fonacier said most of the motorcycle loans were fictitious. He said Dynamic Bank, for instance, made P2.5 billion in motorcycle loans but records showed only 119 of the 44,172 borrowers received their units.The modus operandi was duplicated in the banks’ real estate loans where individuals were paid a one percent-commission on loans they signed up for that were immediately transferred to De los Angeles’ Fusion Capital.Fonacier said the borrowers were made to believe that Fusion would be liable for the loans but it turned out they were still the borrowers of record. She said 10 Legacy banks lent out P3.7 billion.The loans were then converted into property assets by the Legacy banks, which the BSP has found to be grossly overvalued or nonexistent.Fonacier said Legacy banks packaged these dubious assets and loans as long-term sales contracts to Legacy affiliates that were not covered by the BSP to evade its examiners and to show that the loans were all current and its capital was sufficient.
Tuesday, February 24, 2009
Celso delos Angeles siphoned billions, says BSP
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No mention of the Pre-Needs Buy Back scheme.
ReplyDeleteThis was Legacy Consolidated Plans Inc, an SEC Registered and Licensed Pre-Needs Dealer. A fully paid Pension Plan that supposedly offered a Maturity Value, 'Double' that of the Pension Plan Contract Value.
The 'Buy Back Plan' had Legacy Card Inc (a 'MasterCard' affiliate), offer to buy it off the Planholders for i) 10% Maturity Value immediately, ii)90 Balance over 3 Years, via 12 x Quarterly Post Dated Checks (PDC's).
The SEC kept renewing their License to sell more Pre-Need Plans, which LCPI kept selling - even as late as November, whern Checks from the PNBB were already bouncing from October 8th!
Celso de los Angeles is just a
ReplyDeletefront man. More important people
and politicians are involved in the
scam...
I guess this post could also have been titled, "Inept BSP and SEC regulators Allowed Celso delos Angeles to Siphon Billions."
ReplyDeleteAn operation like this would have left obvious, telling marks that early on should have tipped off conscientious and competent examiners about what exactly was going on.
The BSP and SEC are not exactly underfunded organizations struggling with lack of manpower and resources. They could have done the job if they wanted to. It's just that their prima donna attitudes did them in here. Some were even complicit as the investigation led by Senators Roxas, Enrile and Biazon showed.
Changes in personnel from top to bottom in these agencies are in order as well as thorough review of the procedures and policies and the remediation necessary.
Even congressional oversight committees failed here. Too many failure points in these debacle. We ordinary citizens should join hands, probably under the leadership of the PEP Coalition, to make sure that something like this never happens again.
One good idea might be to form a citizen-watchdog group that has the power to invoke an oversight check when they see something amiss with the SEC and the BSP. A foolproof mechanism needs to be put in place. Sayang pinasusweldo nating taumbayan dito sa mga taga BSP at SEC na ito!
Pleasant Post. This record helped me in my school assignment. Thanks Alot
ReplyDelete