New witness testifies in Sandiganbayan trial of Lucio Tan ill-gotten wealth case

Manila Bulletin June 5, 2008

New witness testifies in Sandigan trial of taipan Lucio Tan wealth case
Edmer F. Panesa

Despite the absence of a vital state witness, the Fifth Division of the Sandiganbayan resumed yesterday the trial of the ill-gotten wealth case against taipan Lucio Tan with the government presenting a document that paved the way for Tan to acquire Allied Bank with the help of the late President Ferdinand Marcos.Presidential Commission on Good Government (PCGG) special counsel Catalino Generillo and Solicitor Mauricia Dinopol called to the witness stand PCGG chief librarian Lourdes Magno in lieu of former First Lady Imelda R. Marcos.

Mrs. Marcos failed to show up at yesterday’s proceedings despite being subpoenaed by the anti-graft court last week. Her lawyer Robert Sison said she was not feeling well and that she will also not be able to attend the hearing scheduled today.

Sison, however, told the three-member division headed by Associate Justice Ma. Cristina Cortez Estrada that Mrs. Marcos has expressed her willingness to testify and she will be available for the hearings on June 10 and 11. The government deems Mrs. Marcos a vital witness against Tan because of her continuing claim that 60 percent of the taipan’s business empire is owned by her late husband.

Unfazed by Mrs. Marcos’ absence, state lawyers yesterday presented another witness in the person of Magno, who turned over to the court original copies of 14 documents that include a letter dated March 26, 1977, of Tan to the former President.

Tan’s lawyer Estelito Mendoza, however, dismissed the letter as immaterial and irrelevant to the case. He said the letter did not prove the government claim that some of Tan’s businesses were ill-gotten.

In his letter, Tan asked Marcos to persuade then government-owned Philippine National Bank (PNB) to issue a P310-million standby letter of credit in favor of the Central Bank (CB) for his acquisition of General Bank and Trust Co. (Genbank), which is now known as Allied Banking Corp.

A standby letter of credit serves as a guarantee in the fulfillment of a contract or obligation.The PNB issued a letter telling CB that it would issue such letter of credit for P300 million despite the fact that the state-owned commercial bank, based on its 1972 financial statement, had a single-borrower limit of P200 million.

It will be recalled that prior to Tan’s acquisition of Genbank, it was temporarily closed by CB because of liquidity problem. CB wanted at that time to reopen Genbank so it invited prospective investors and one of them was Tan. However, Tan had difficulty complying with the condition of CB for a standby letter of credit, so he wrote Marcos.

According to PCGG’s Generillo, Tan’s March 26, 1977, letter made it possible for him to acquire Genbank, which he later changed to Allied Bank.

“Even Lucio Tan admitted in his letter that it would be very difficult for them to comply. The letter was dated March 26 but the bidding of CB was to take place on the 28th, meaning they only had one day to produce that standby letter of credit,” Generillo said in an interview.

Generillo said Tan obtained Genbank after the PNB issued a mere letter saying that it would issue a standby letter of credit. “It was not a standby letter of credit, just a letter saying that PNB would issue a standby letter of credit. What happened next is that after Central Bank awarded Genbank to Lucio Tan, they changed the terms and condition of bidding,” Generillo said.

“But instead of submitting a standby letter of credit, which it promised Central Bank, hindi rin ‘yun natuloy kasi pinalitan ng mortgages na lang instead of standby letter of credit,” he added.

Generillo said the March 26, 1977, letter bolstered their claim that Tan and Marcos were business partners as shown by the preferences given by the former President for the advancement of Tan’s businesses.“Lucio Tan was really given preferences by Marcos, as I have presented through testimonial and documentary evidence,” he said.

Can you see how a super-cheat this Intsik is? P500k is the value of a commercial bank only? Even a rural bank costs much more than that! Gregorio Lecaros must be burning in hell, howling on the Yellow Economic Lucifer!