MANILA, JUNE 20, 2006
(STAR) Controversial Presidential Adviser Roberto R. Romulo is once again in the limelight with the filing of a criminal case by Government Service Insurance System (GSIS) chief Winston Garcia with the Department of Justice for violation of the Securities Regulation Code (SRC) of the Securities and Exchange Commission (SEC) and Article 318 of the Revised Penal Code. Named as co-respondents in the criminal suit were Antonio Go, Anthony Conway, Peter Go Pailan, Romulo’s former co-directors at the Equitable PCI Bank (EPCIB) and former EPCIB corporate secretary Atty. Nilo Divina.

Garcia pointed out that Romulo, Go, Conway, Go Pailan and Divina conspired with one another to withhold information from stockholders and from other members of the nomination committee that Romulo was not qualified to sit as independent director of EPCIB because he was a member of the board of directors of Equicom Systems Management Inc., a company which is a joint venture of the Equitable Group and Telus International.

This was in blatant violation of Section 38 of the SRC which provides that "independent directors shall mean a person other than an officer or employee of the corporation, its parents or subsidiaries or any other individual having a relationship with the corporation, which would interfere with the exercise of independent judgment in carrying out the responsibilities of a director," the complaint said.

Romulo accepted his election and assumed office as independent director of EPCIB despite knowledge of the fact that he is not qualified for the position, the suit alleged.

Romulo’s co-respondents in the criminal case breached the trust reposed on them by stockholders in order to preserve "the artificial majority that the Go family had in the Board of Directors to the prejudice of the minority stockholders, including the GSIS and the Social Security System (SSS), who were all deprived of their right to have a legitimate and qualified independent director in the board," Garcia’s complaint further said.

As an independent director, Romulo is mandated by law to exercise his own independent judgement free from the influence of the other members of the board and other related interests. However, the actions he had taken while serving as independent director of the EPCIB allegedly showed his partiality in favor of the Go family.

Romulo had reportedly sided with all the nominee directors of the Gos, especially with regard to actions that would perpetuate the family’s hold and influence on the affairs of the bank despite the fact that they were no longer the majority shareholders.

Early this year, the Compliance and Enforcement Department of the SEC said documents on file with the commission showed that EPCIB has violated Section 38 of the SRC and Rule 38 of the Implementing Rules and Regulations of the SRC pertaining to the qualifications of an independent director, and the non-disclosure of Romulo’s affiliations with Equitable Card Network Inc. (ECNI), a subsidiary of EPCIB.

Despite his lack of qualification - a fact known to Go, Conway, Go Pailan and Divina – Romulo was still elected as an independent director, therefore defrauding the GSIS, the SSS and other minority shareholders and depriving them of their right to have a qualified independent director who should be independent of management as mandated by law, Garcia reiterated.

Section 38 of the SRC and Rule 38 implementing the same under Section 51, paragraph 51.4 of the code declares that "it shall be unlawful for any person to aid, abet, counsel, command induce or produce any violation of this code, or any rule, regulation or order of the commission hereunder."

Pertinent provisions of Article 318 of the Revised Penal Code sub-headed "Other Deceits" states that "the penalty of arresto mayor and a fine of not less than the amount of the damage caused and not more than twice such amount shall be imposed upon any person who shall defraud or damage by any other deceit not mentioned in the preceding articles of this chapter."

Subpoenas have been sent to the above-named respondents and the preliminary hearing is set on June 22 at the Department of Justice, Garcia disclosed.

Chief News Editor: Sol Jose Vanzi

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