From: Legacy Group Banks May Be Doomed

[johnb]

http://www.bworld.co...tent.php?id=023PDIC to begin servicing rural bank depositors claims by Feb. STATE DEPOSIT insurer Philippine Deposit Insurance Corp. (PDIC) has tasked a local accounting firm to do the work of winnowing out valid deposit insurance claims in a bid to expedite payout to depositors of padlocked rural banks. In a briefing with journalists yesterday, PDIC President Jose C. Nograles said SGV & Co. will sign an agreement with the PDIC next week for the job.SGVs task will involve validating the insurance claims of depositors of 13 rural banks that belonged or were linked to the Legacy group, which were placed under PDIC receivership in December on account of insolvency. These banks have a total of P14 billion in insured deposits, accounting for nearly a quarter of PDICs P60 billion deposit insurance fund (DIF).The deal would allow depositors to get their money by mid-February, Mr. Nograles said. The maximum deposit insurance coverage is currently at P250,000, pending the passage of a bill that doubles it to half a million pesos.If PDIC doesnt outsource the task, servicing depositors claims could begin only by the third quarter, given PDICs existing workforce of about 800, he pointed out."We will outsource the claim payments system. The idea is to speed up. The auditors said they can work on it in two to three weeks," Mr. Nograles said. "Im targetting by February, before Valentines Day, there will payouts."The series of rural bank failures has been hurting the coffers of the PDIC, which allocates only about P3.3 billion annually for possible payouts."Last year, we were okay. But this year, because of Legacy, to be frank, we might take a hit on our DIF," Mr. Nograles said. He pointed out, however, that the the insurance premiums collected by PDIC, to the tune of P7 billion annually, should serve as a buffer against further depletion of its reserve fund.However, he stressed the need to beef up the DIF. PDIC, he said, is seeking sovereign guarantee on its debts, as it is considers floating bonds as option to shore up its capital. Another is outright state contribution while a third is exemption from taxes. Maria Eloisa I. Calderon

[Mr Lee]

http://www.sunstar.com.ph/davao/sec-warns-...h-money-schemesSEC warns investors on 'get-rich' money schemesThursday, January 15, 2009 COMPANIES offering get-rich money schemes are expected to become more prevalent especially during hard times. This has led the Securities and Exchange Commission (SEC) to warn the public to be more cautious and careful in making an investment. "Before you invest, there are certain things you need to know about the company that you are (dealing with)," said SEC-Southern Mindanao regional director Javey Francisco on Wednesday's Club 888 at Marco Polo Davao.Some of the questions that a would-be investor must ask are: Is the company registered with the SEC? Is it licensed to sell securities? Francisco warned people on the possibility of illegal fly-by-night companies that promise easy money to its investors. Recently, investors in Visayas and Mindanao were surprised by the dissolution of the Legacy Investment.Francisco explained that the Legacy Group has 10 different corporations that filed for voluntary dissolution. Of these, only two were said to have a trust fund. "Since only two corporations have trust funds, it means that investors might not get their investments back," he said. This caused fear to most investors of the Legacy Group as they have a slim chance of getting their investments back. Francisco, however, explained that the 10 corporations have three years to sell or liquidate their assets so as to return the members' investments. These corporations, however, would first have to settle taxes and pay employees affected by the dissolution. Giving back the money to its investors would then follow after these issues are settled. Thus, the SEC informed the affected investors that their complaint would be the company's third priority and would be addressed possibly on a later period. The SEC then assured the affected investors that the office will assist in collating their complaints and claims and such will be forwarded to the company concerned. (PIA/Mai Gevera)

[Mr Lee]

Proposed increase in deposit insurance gets mixed reactions Updated January 13, 2009 12:00 AMThe Philippine Deposit Insurance Corp. (PDIC) said that the proposed doubling of the maximum deposit insurance coverage, from P250,000 to P500,000, which has recently passed second reading in the Senate, is a preemptive response to the deepening global financial crunch.PDIC President Jose C. Nograles said that the proposed doubling of the maximum deposit insurance coverage should confidence in the stability of the banking system. He said that it is consistent with current global initiatives that strive to address the financial crisis currently unsettling economies around the world.Queried on whether the 15 banks placed under PDIC receivership by the Monetary Board of the Bangko Sentral ng Pilipinas (BSP) including the 13 banks recently identified with the Legacy Group will be covered by the increase in deposit insurance coverage, Nograles clarified that those banks as well as others which have already been closed to date, will not be covered by the increase.The increase is prospective. The P500,000 level will apply only to those banks closed after the ratification of the law increasing the coverage, he said. We must remember that the increase is a pro-active measure in the light of the global financial crisis. The failure of these (Legacy) banks had nothing to do with the crisis. According to reports by the BSP, these banks had problems even before the crisis started, Nograles added.Read the whole story, click the link belowhttp://www.philstar.com/Article.aspx?Artic...ubCategoryId=74

[johnrxx99]

Further on the non-Legacy banks. Looks Gaisano are up to their necks in it and I wonder to whom the alleged loans were made to.http://business.inquirer.net/money/topstor...ows-to-tell-allFormer rural bank head vows to tell all By Daxim Lucas Philippine Daily Inquirer First Posted 02:15:00 01/16/2009 Filed Under: Banking, Financially Distressed Companies The former president of the shuttered Rural Bank of Subangdaku claimed the so-called fictitious loans that had been blamed for its collapse were completely aboveboard.Paz C. Radazas statement came after it was revealed that the rural bank based in Cebu province, owned by the Gaisano family, held P1.2 billion in loans equivalent to 85 percent of its assets totaling P1.4 billion that were allegedly released in circumvention of normal procedures.In an email to the Philippine Daily Inquirer, Radaza said all loan transactions had the knowledge and approval of the board.Radaza was last years head of the Rural Bankers Association of the Philippines (RBAP). She is the wife of the incumbent mayor of Lapu-Lapu City in Cebu provinceShe said she was ready to divulge more details about the operations of Rural Bank of Subangdaku.At the proper time, I will provide the public and the regulators with the copy of my resignation letter addressed to the board of directors of [the bank] so that the truth will come out, she said.Radaza added she would issue a more in depth statement to the media so the public and the regulators could have a clearer picture on what had happened to the rural bank at the proper time.Last week, authorities ordered the closure of the Rural Bank of Subangdaku after it failed to service withdrawals of clients made jittery by the closure of banks linked to the Legacy Group.The discovery of the allegedly fictitious loans caused Rural Bank of Subangdaku to become not only illiquid but also insolvent. This prompted the central bank, Bangko Sentral ng Pilipinas (BSP), to order its cessation of operations and placed it under receivership by the governments Philippine Deposit Insurance Corp. (PDIC).Bank chairman Peter Gaisano said at least three of the banks branches in the Visayas region were near branches of Legacy Group rural banks, and the physical proximity caused its clients to withdraw their funds.Gaisano said the family known mainly for its retailing business was looking for an investor that could help the bank resume operations within the 90-day period allowed by PDIC.Rural Bank of Subangdaku had been servicing withdrawals only intermittently since mid-December. It declared a voluntary bank holiday last Jan. 5.The BSP made available a P700-million emergency loan for it on condition that it presented acceptable collateral. The bank came up only with P10 million worth of acceptable collateral.In her statement, Radaza said her resignation from the bank was not an isolated event and was immediately preceded by the resignation of the former chairman, Francisco Gaisano, who was replaced by his brother, Peter.Edited by INQUIRER.netHow can any bank survive if it makes 3 loans for 85% of assets and be solvent. Beggars belief but it's Gaisano so that's alright then. Bit like opening a bank, lending all the money to your mates and then expecting taxpayers to pay depositors back and walking away. Lovely jubbly.

[tom_shor]

Strange things have been going on with Rural Banks for years. That's not to say they are all shaky but there always seems to be something happening in the rural banks.

[Mr Lee]

Legacy pre-need firms close shop SEC urges planholders to file complaintBy Doris DumlaoPhilippine Daily InquirerFirst Posted 21:01:00 01/18/2009MANILA, Philippines Three pre-need companies under the controversial Legacy group have closed without obtaining approval from the Securities and Exchange Commission.The SEC urged planholders of Legacy Consolidated Plans Inc., Scholarship Plan Philippines Inc. and All Asia Plans Corp., to file by March 31 this year their sworn complaints with the non-traditional securities and instruments department of the commission.In a new notice to the public, the SEC asked planholders to provide information on their present and complete mailing addresses and contact numbers together with a copy of their plan contract, certificate of full payment and other relevant supporting documents.Under the new rules on the registration and sale of pre-need plans under the Securities Regulation Code, the three pre-need companies were to establish a trust fund for each type of plan they sold to enable them to deliver promised benefits to the planholders.Read the whole story, click the link belowhttp://business.inquirer.net/money/topstor...irms-close-shop

[Mr Lee]

Blogs, One persons tale of woe from the Legacy scam. Anyone else wish to give theirs? Do you feel you were defrauded or was your sales person honest with you as to the chance you were taking?Here are some excerpts from this womans experiencesTheres no place good enough for scam artists but the darkest, foulest, living hell where cretins that go bump in the night are more sinister than the exorcist and the predator combined.What is so wrong with this picture?Defraud your clients. Defraud the government. Defraud taxpayers. These people are trying to get into everyones pockets. How can they sleep well at night? Read her comments at the link below and tell us yours.http://blogs.inquirer.net/moneysmarts/2009...cy-scam-victim/

[johnb]

Copied from the PDIC Website full link at bottom of pagePDIC Targets Claims Payout in Mid-Feb for 12 Closed BanksPhilippine Deposit Insurance Corporation (PDIC) President Jose C. Nograles said the deposit insurer has targeted the middle of February as the start of payout of deposit insurance claims in 12 banks placed by the Monetary Board under PDIC receivership in December 2008. These banks combined have estimated deposit accounts of over 135,000 in 50 locations all over the country. These accounts have to be examined prior to payout, and PDIC has undertaken various measures to fast track the examination and payout process. Among these measures is the deployment of more than half of the Corporations personnel complement on field. Another is the engagement of a Bangko Sentral ng Pilipinas-accredited external auditor to assist in the pre-settlement examination. The pre-settlement examination is a prerequisite to claims payout. PDICs paramount concern is to pay valid claims of depositors at the soonest possible time to provide them immediate relief. However, as in any claim for insurance, we need to examine bank records and evaluate these to verify their validity before we can begin payout in order to safeguard the Deposit Insurance Fund (DIF) and to protect depositors by ensuring that payments are made to the right persons, Nograles said. The DIF is the source of payout for claims for deposit insurance. PDIC is mandated by law to safeguard the DIF. Nograles assured that the DIF is sufficient to pay all valid claims for deposit insurance. The outsourcing of pre-settlement examination will speed up the process and will enable PDIC to start payout by middle of February. Our priority is to service the claims of small depositors with deposits of P100,000 and below. Based on available data, they represent about 62% of deposit accounts in these 12 closed banks, Nograles said. Top audit firms Manabat,Delgado, Amper & Co. (Deloitte Touche Tohmatsu), Isla Lipana & Co. (Price Waterhouse Coopers), Manabat San Agustin & Co. (KPMG), SGV (Ernst & Young) and Punongbayan & Araullo (Grant Thornton International) have signified interest to undertake the engagement. http://www.pdic.gov.ph/index.php?nid1=8&am...2=1&nid=301

[Mr Lee]

Depositors to get money in 3 weeks By Carine M. AsutillaCebu Daily NewsFirst Posted 09:11:00 01/23/2009DEPOSITORS of the closed rural banks under the Legacy Group of Companies will be able to get their insurance claims in about three weeks."De la Cerna said the depositors of these banks can get maximum insurance claims of P250,000.But he said he could not assure investors of the Legacy group's pre-need companies that they will get their investments fully"."De las Cerna said that all the Legacy corporations have submitted the list of names of their investors to SEC when they filed the petition.He advised investors to check if their names were in the list of investors at the SEC and if their names were not indicated there, then they could file a complaint at SEC." Read the whole story, click the link belowhttp://globalnation.inquirer.net/cebudaily...oney-in-3-weeks

[Mr Lee]

PDIC exec seeks passage of charter amendmentsPDIC president Jose Nograles said over the weekend that PDIC supports the initiative to investigate alleged irregularities in the Legacy Group-affiliated banks recently placed by the Monetary Board under PDIC receivership.Nograles also explained why the passage of the amendments should not be tied to the probe.These Legacy-affiliated banks and banks closed prior to the effectivity of the law [when passed and] will not benefit from the increased deposit insurance, he pointed out. The law is prospective and will cover banks closed after the ratification of the law, he said.To read the whole story, click the link belowhttp://www.abs-cbnnews.com/business/01/25/...rter-amendments