THE Department of Justice yesterday recommended the filing of malversation, graft and other charges against former lawmaker and Local Water Utilities Administration head Prospero Pichay, acting LWUA Administrator Daniel Landingin, and several others in connection with the alleged illegal acquisition of shares of stocks from a troubled bank.  

Government prosecutors found probable cause against Pichay and Landingin during preliminary investigation into the cases filed by the complainant, Finance Secretary Cesar Purisima.

The DoJ recommended to the Office of the Ombudsman the filing of malversation of public funds, violation of the Anti-Graft and Corrupt Practices Act, and Manual for Regulations for Banks in relation to Section 36 of the New Central Bank Act against Pichay and Landingin.

In his complaint, Purisima claimed that Pichay, Landingin, and the other members of the Board of Trustees of LWUA in acquiring shares of stocks of financially troubled Express Savings Bank Inc. (ESBI), without obtaining the requisite approvals from the Department of Finance, the Office of the President, and Monetary Bank.

Purisima added that LWUA paid more than P80 million to acquire approximately 60 percent of the outstanding capital stock of ESBI, the actual book value of which at that time was only more than P30 million.

Moreover, the respondents subsequently took out the amount of P400 million from LWUA funds, again without obtaining the required prior approval from the Monetary Bank and Bangko Sentral ng Pilipinas, and deposited the same with ESBI to cover up the bank’s severe capital deficiency.

The DoJ found that the manner by which respondents entered into the transactions that are “irregular and at the same time, manifestly and grossly disadvantageous to the government- which was achieved by unlawfully taking procedural shortcuts and evading the required governmental approvals, and which thus caused undue injury to the LWUA’s funds – constitute unlawful acts and corrupt practices.”