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Philippines

MANILA BUSINESSMAN APOLOGIZES TO CARDINAL SIN FOR BANK DEBACLE

Updated: May 18, 1997 05:00 PM GMT
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The businessman who bought the Manila archdiocese´s share in the troubled Monte de Piedad and Savings Bank has apologized to Cardinal Jaime Sin of Manila, saying accusations against the cardinal were false.

"I have never intended to put the blame on the Church, much less to accuse it of deceit, in the negotiation for the sale of the bank," Vicente Tan told the cardinal in a letter dated May 9.

"I felt bad that you would have to be dragged into this issue," Tan said of media coverage surrounding the bank´s closing April 23.

A "Manila Times" newspaper report April 27 alleged that the cardinal, his relatives and two bishops had misused bank funds and caused the collapse of Monte de Piedad, declared insolvent by the Central Bank of the Philippines.

The bank failed to collect 1.8 billion pesos (US$67.7 million) in loans to tricycle drivers, teachers and small-scale business under a Church program.

Philippine newspapers quoted Tan as saying the Church had not fully disclosed the bank´s financial status when he bought its 70 percent share in 1995 and later acquired an additional 20 percent from other stockholders.

Tan told the cardinal he could not answer the allegations earlier because he did not want to jeopardize negotiations for the bank´s reopening.

"Like the others who have expressed support for you, I affirm the selfless commitment you have for the Church and how your whole family has constantly rendered personal sacrifices to assist you in fulfilling your ministry effectively," Tan wrote.

He also denied that the Church withdrew its funds from Monte de Piedad before it experienced a run. The archdiocese reportedly has 90 million pesos in the bank.

Tan reiterated his love for the Church and said, "My deep gratitude stems from having been made a member of the papal family despite my sense of unworthiness," referring to his being made a Papal Knight of St. Sylvester.

Copies of Tan´s letter were sent to media organizations May 12.

Meanwhile, archdiocesan treasurer Monsignor Hernando Coronel said the Church will not coddle any member proven to have contributed to the bank´s problems.

In a January report, the Central Bank´s Supervision and Examination Sector named 14 former Monte de Piedad officials and members of the board responsible for the loan transactions.

The list included Caritas Manila executive director Monsignor Francisco Tantoco Jr., a member of the credit committee, and former archdiocesan treasurer Monsignor Domingo Cirilos Jr., a member of the board of directors.

Monsignor Coronel said a 1994 internal audit of the bank concluded that Strategic Lending Investors Inc. (SLI), the conduit for the loan program, was earning 89 times more than Monte de Piedad.

He noted that SLI had an initial capital of 100,000 pesos in 1991, and in three years had a paid-up capital of 93 million pesos.

The monsignor said the report described Monte de Piedad (mount of charity) as "overly dependent" on SLI for the collection of loan payments.

"This agreement with SLI proved to be detrimental to the bank. Whoever is behind the arrangement should answer for it, be they bishop, priest or lay," he concluded.

Monte de Piedad reopened May 8 under the Keppel Group of Singapore after Keppel infused 1 billion pesos into the bank in exchange for 89.6 percent of its shares.

END

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