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Directors of realty firm locked in legal battle

Vol. XXII, No. 108 [ BusinessWorld Online ]

Wednesday, December 24, 2008 | MANILA, PHILIPPINES

DAVAO CITY — A boardroom battle at a realty company owned by the family of former Interior and Local Government Secretary Luis T. Santos has developed into a full-blown courtroom war.

Mr. Santos and nephew Francisco C. Santos, Jr., both major shareholders of Santos Land Development Corp., one of the biggest property firms in this city, have sued each other over fraud.

In his complaint, the older Mr. Santos accused his nephew and wife Leonida of defrauded the company of about P1.144 million. His nephew, then the chairman of the company, allegedly pocketed the money in 2006.

But the younger Mr. Santos and his wife claimed the case filed against them was baseless. A source from the company, however, claimed the conflict had stemmed from the company’s board election this year. In that meeting, the board led by the Santos couple elected Antonio S. Domingo as chairman to replace his uncle. Luis and two directors of the seven-member board opposed the election of Mr. Domingo. The dispute has also stirred the regional trial court since some of the judges are either relatives or associates. One judge has inhibited from the case, while another had tried to reconcile the parties without much success.

In his complaint, the elder Mr. Santos said he had found out about the anomaly when he became chairman this year. He claimed to have demanded a refund in September, but the couple ignored his request, forcing him to sue them for estafa last month.

But in a pleading filed on Dec. 5, the Santos couple sued their uncle for perjury, unjust vexation and intriguing against honor. The couple, both architects, also claimed the amount they had received was payment for the wife’s fees for a company project in 2005.

They also claimed the older Mr. Santos had known about the payment, which was included in a company report. — Carmelito Q. Francisco


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