Thursday, October 8, 2009 | MANILA, PHILIPPINES [ BusinessWorld Online ]
BUSINESSMAN RAMON "RJ" P. Jacinto said a Court of Appeals decision allowing the Philippine National Bank (PNB) to take over Makati and Tagaytay properties owned by his firm was just a "paper" victory for the Lucio C. Tan-led bank, saying the foreclosure dispute would have to be settled by the Supreme Court.
In a statement, Mr. Jacinto said: "I do not owe PNB money. I gave PNB cash of $40 million. What PNB gave me was a mortgage (a piece of paper) on 80% of the property. PNB was the seller and the banker. They received the cash from the mortgage. I never touched nor saw any cash from the mortgage."
The statement said PNB’s "high-powered lawyers are deluding themselves that they have a strong case."
"It’s so clear the Supreme Court had a final ruling [ in 2006] that all collaterals must be returned to status quo ante or the state before foreclosure because RJ cannot be considered in default until a full trial on the merits."
PNB and RJ Ventures Realty and Development Corp. are particularly fighting over a prime lot on Gil Puyat (Buendia) Avenue, which Mr. Jacinto said he had bought from the bank for $140 million in 1996.
Court records showed First Women’s Credit Corp. (FWCC) acquired for P3.68 billion the Gil Puyat Avenue property on July 17, 1996 with a loan from PNB. The firm later assigned all its rights, claims and interests over the property to RJ Ventures. To pay for the balance of the purchase price, RJ Ventures applied for a loan with PNB worth P2.944 billion.
The bank required a 10% downpayment or P368 million.
To pay for this, affiliate Rajah Broadcasting Network, Inc. borrowed P350 million from PNB. Used as security were a 70% stake in Rajah as well as Mr. Jacinto’s 40% stake in FWCC. Meanwhile, Rajah secured another loan worth P100 million to cover interest payments. This was secured by a chattel mortgage over broadcast equipment and the Tagaytay lot.
The loans of RJ Ventures and Rajah reached P5.405 billion and P841 million, respectively. When these went sour in 1999, the bank started foreclosure proceedings. RJ Ventures sought an injunction from the Makati Regional Trial Court, but this was denied.
In 2006, however, the Supreme Court ruled in favor of RJ Ventures, granting a status quo order and ordering a trial on whether RJ Ventures had indeed defaulted.
But the appellate court said "there was nothing in the [Supreme Court] decision ... , about the restoration of possession over the [two properties]."
Mr. Jacinto said he was "persecuted" by the Estrada administration, which he indicated had resulted in PNB turning back on a debt restructuring deal. "In the same manner ex-President [Joseph E. Estrada] went after [businessman Alfonso T. Yuchengco], he went after me because I was perceived to be close to ex-President [Fidel V. Ramos]," Mr. Jacinto said in a statement.
RJ Ventures lawyers will ask the Supreme Court to look into "possibly tainted" court records, claiming a Makati court decision favoring PNB "could have been ante-dated and page numbers were ’snow-paked’ to allow insertion," the statement said.
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