Thursday, October 22, 2009 | MANILA, PHILIPPINES [ BusinessWorld Online ]
LISTED Export and Industry Bank, Inc. has denied reports alleging the sale of its P2.6-billion building to its subsidiary was a "simulated sale," which allowed the bank to raise its capital.
In separate disclosures yesterday, Exportbank and subsidiary ArthaLand Corp. (ALCO), formerly EIB Realty Developers Inc., denied allegations the sale was "not a true sale" since the the property developer paid just a portion of the purchase price.
"ALCO’s acquisition of Exportbank Plaza is a true sale," ALCO said in a disclosure.
"Appropriate approvals of its Board were duly obtained and the sale was booked in accordance with the international accounting standards as fully disclosed to all its regulators and stockholders," the property developer said.
Reports on Wednesday quoted anonymous central bank officials as saying the 2007 sale of Exportbank’s P2.62 billion building located in the Makati central business district to the bank’s unit was questionable.
The sale was supposedly done to allow the bank to beef up its capital, which was inadequate at the time of the sale.
The unconfirmed report said less than P200 million was paid to Exportbank, evidence to the sketchiness of the deal.
While ALCO did not deny that only a portion of the purchase price has been paid, the firm explained that there were still conditions that needed to be completed before it pays the balance.
Central bank officials could not be reached for comment.
Exportbank is selling its non-core assets, including its properties, to concentrate on its main business. The focus on its core business, it said, was in line with finding new investors who could plough fresh capital into the bank.
Trading of Exportbank shares have been suspended because it still has not submitted its 2008 annual report and its first and second quarter reports.
In May, when it asked the stock exchange to stop the trading of its shares, it said it could not comply with the deadline for the submission of its statements of condition for the first quarter since the 2008 annual report was not ready.
The annual report still needed to be finalized because Exportbank was in "advanced" stages of discussions with prospective investors.
Both the Rizal Commercial Banking Corp. and Banco de Oro Unibank, Inc. have said they were interested in Exportbank. — Paolo Luis G. Montecillo
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