Land Bank, not only DBP, lent Ongpin company another $90M
Loan approved before borrower identified, 'hidden hand'
now apparent -- Osmeña

Land Bank, not just the Development Bank of the Philippines, also approved and released $90 million to a Roberto Ongpin-linked company capitalized at only $2 although it did not apply for a loan.

Sen. Serge Osmeña said Global Air Services (GAS) is also a non-existent company under Philippine laws since it is not registered to do business here. DBP and LBP each contributed $90 million to lend to GAS which then used the $180 million to buy MRT securities some of which were held by companies linked to Ongpin himself.

He said "for two government banks to do the same thing at the same time and break the same laws, there is only one explanation: there was an order from the top."

Public funds, he added, were used and exposed to extreme risk since the borrower did not apply for a loan and is non existent. "How can you get repaid? For one, GAS had only a paid-up capital of $2. Secondly, it is non existent under Philippine laws and therefore we have no jurisdiction to go after it."

Osmeña also said: "It is almost inconceivable to think that several people in high places would act as one not to protect public interest, but to put it to extreme prejudice. Conspiracy has raised the legal stakes for those involved and the ongoing Senate inquiry will plumb the dark depths of this transaction."

In the Senate inquiry that resumed yesterday, Ongpin denied he owned GAS although he admitted that the very same office staff who represented him in all his corporations, including the Philex loan also given by DBP to Ongpin under questionable circumstances, were the same ones representing GAS.

"DBP and Land Bank could have directly bought the MRT bonds and preferred themselves by retaining an investment bank as I understand was the original plan, and that would have been more cost efficient, transparent, and most of all, legal. But along the way, somebody thought of bringing in GAS and that is where these problems all began," he said.

"GAS and its corporate web were dealing from both ends. Presidio, the alleged holding company of GAS, was adviser to MRTC, the company that issued the securities, on how to sell out to government. The government then lent GAS $180 million to buy MRT securities most of which were held by companies related to Ongpin himself. Nobody knows the price. Lutong macaw ito from start to finish, and in between," he said.