Court stops confiscation of P1.47-b EIB properties

The now shuttered Export and Industry Bank has obtained a reprieve from the Court of Appeals, which stopped the garnishment of P1.47 billion worth of DMCI shares managed by the bank’s stock trading unit.

The appellate court issued a permanent injunction on April 26 stopping the Makati City regional trial court from enforcing the latter’s two orders holding the beleaguered bank liable for unauthorized sale of 32.18 million DMCI shares by brokerage firm EIB Securities.

It arose from the legal action initiated by Pacific Rehouse Corp., Pacific Concorde Corp., Mizpah Holdings Inc., Forum Holdings Corp., and East Asia Oil Co. Inc. for alleged unauthorized sale of the DMCI shares by EIB Securities.

The lower court, on Aug. 26, 2011, directed the garnishment of P1.47 billion, representing 32.18 million DMCI shares at P45.55 per share against EIB Securities. It authorized the sheriff to acquire the said amount of shares of stock from the Philippine Stock Exchange at the cost of EIB Securities Inc. and Exportbank.

The supposed garnishment covered all holding money, properties, and personal belongings owned by Exportbank and EIB Securities.

The RTC also ruled that EIB Securities was a mere business conduit or alter ego of Exportbank. It said the bank, as 99-percent owner of EIB Securities has absolute control of the affairs of the brokerage firm.

In a decision penned by Associate Justice Mario Lopez, the Court of Appeal’s special 14th division resolved to nullify the regional trial court’s orders and said Makati Judge Joselito Villarosa has no authority to declare the invalidity of the previous orders or resolutions of a higher court.

“The disquisition of the RTC, which is a declaration against the validity of a high court’s order, is a blatant disregard of the principle of hierarchy of courts,” the CA ruling stressed.

The Bangko Sentral last week ordered the closure of Exportbank and placed it under the receivership of state-run Philippine Deposit Insurance Corp., after the bank stopped servicing the claims of depositors.

The bank has more than 50,000 depositors, with total claims of over P15 billion.

 

Source: http://manilastandardtoday.com/2012/05/02/court-stops-confiscation-of-p1-47-b-eib-properties/

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