Ex-DBP executive convicted in property undervaluation case

MANILA, Philippines – The Sandiganbayan has convicted a former senior executive of the Development Bank of the Philippines (DBP) over the undervaluation of a foreclosed property that caused the state-owned bank over P43.4 million in losses 13 years ago.

The anti-graft court’s 6th division, in a ruling on Wednesday, March 25, found former DBP senior assistant vice president Romeo Aguilar guilty of gross inexcusable negligence for setting the appraised value of foreclosed assets of the firm Milestone Paper Products Incorporated in Cabuyao, Laguna at P56.27 million. It was found to be below the adjusted value of P116.9 million.

The court sentenced the former bank executive to six to 10 years in prison and barred him for life from holding public office, with all retirement and gratuity benefits forfeited.

He was also ordered to pay DBP P43.452 million, with 6% annual interest until fully paid.

The court’s 73-page decision, signed by Associate Justice Kevin Narce Vivero and concurred by Associate Justices Sarah Jane Fernandez and Lord Villanueva, showed that Aguilar also approved a maximum bid price of P45.82 million instead of P89.3 million. As a result, the court said, the government bank lost in the foreclosure sale to JRK Holdings Corporation.

The Sandiganbayan ruled: “Accused Aguilar unilaterally and without authority devalued the property mortgaged to the DBP relative to MPPI’s loan. Worse, accused Aguilar excluded the value of the lot covered by TCT No. 643861, thereby decreasing the appraised value of the Cabuyao-REM.”

The Cabuyao assets comprised seven lots, six with improvements, which were transferred by the DBP marketing department to Aguilar’s remedial management department in December 2011.

The anti-graft court said Aguilar requested a reappraisal only on May 3, 2013 and “proceeded hurriedly” with the foreclosure sale on July 11, 2013 without waiting for a report from the bank-accredited appraiser Intech Property Appraisal Incorporated.

Before the foreclosure, the court noted, the properties had already been valued at P1,500 per square meter, or about P135.31 million, while a separate valuation by DBP’s credit appraisal management department set a lower price of P1,400 per square meter, or over P103.5 million.

The Sandiganbayan said Aguilar unilaterally adjusted the valuation of the property by excluding 40,418 square meters, and gave unwarranted benefit to JRK at DBP’s expense. 

“For all intents and purposes, he handed the Cabuyao-REM to JRK on a silver platter. This was unauthorized, without justification, and mind-boggling,” the court stated.

The court said a senior government bank executive like Aguilar was expected to act with “utmost and undivided loyalty” to the bank and carry out his duties “with due care, extraordinary diligence, skill, and good faith.”

It said Aguilar “failed to live up to the standard of diligence demanded… he should have been the first to follow the said rules… sadly, however, he was the first to break them.” – Rappler.com