Facts:

In the case of Gregorio Ma. Araneta III v. The Honorable Sandiganbayan (Second Division) and Presidential Commission on Good Government (PCGG), G.R. No. 106718, decided on March 20, 1995, the petitioner's contention was centered around the authority of the PCGG to conduct preliminary investigations and file charges regarding alleged violations of the Anti-Graft and Corrupt Practices Act against him. The case arose from a complaint filed with the PCGG by the Philippine National Bank (PNB), the National Investment and Development Corporation (NIDC), and the Pantranco North Express, Inc. (PNEI). The accusations were related to the controversial sale of PNEI assets to North Express Transport, Inc. (NETI), a corporation primarily owned by Araneta III, who was also the son-in-law of the late President Ferdinand E. Marcos. Notably, this sale was facilitated under terms that permitted premature delivery of PNEI's assets to NETI even before a purchase agreement was executed.

The

...

Facts:

Background and Initiation

• The case arose from complaints filed by the Philippine National Bank (PNB), the National Investment and Development Corporation (NIDC), and Pantranco North Express, Inc. (PNEI) regarding the sale of PNEI assets.
• The assets in controversy included a major portion of PNEI’s public utility assets, utility buses, and other properties, as well as income derived from their operation prior to full execution of the purchase agreement.
• The sale was struck between PNEI and North Express Transport, Inc. (NETI), a newly organized paper corporation purportedly owned and controlled by Gregorio Ma. Araneta III – who is also the petitioner and son-in-law of the late President Ferdinand E. Marcos.

The Preliminary Investigation by the PCGG

• Upon receipt of the complaints, the Presidential Commission on Good Government (PCGG) conducted a preliminary investigation into the alleged improper transfer of assets and the irregularities in the sale.
• During the investigation, petitioner Araneta III, who was then in “forced” exile abroad, appeared by counsel and requested an extension of time to file his counter-affidavit and other evidence pending his return.
• His motion for extension was denied by the PCGG, which continued the investigation against him and his co-accused.

Charges and Amended Information

• On January 20, 1987, an amended information was filed charging Araneta III and other co-accused with violation of the Anti-Graft and Corrupt Practices Act (Republic Act No. 3019, as amended).
• The information alleged that:
• PNEI assets, including those not originally intended for sale, were prematurely delivered to NETI under manifestly disadvantageous terms.
• The transaction was facilitated through misleading and undue influence on the Boards of Directors of PNB, NIDC, and PNEI.
• The deal, executed without proper board resolutions and in disregard of better offers, resulted in substantive unwarranted benefits amounting to hundreds of millions of pesos and caused significant damage to the government.
• The allegations emphasized elements such as “manifest partiality,” “grossly disadvantageous terms,” and unwarranted benefits and injuries to the government.

Procedural History and Motions

• Prior to arraignment, Araneta III filed an omnibus motion (on December 18, 1991) seeking either the quashing of the amended information or its referral to the Ombudsman for reinvestigation.
• The motion argued that the PCGG was not authorized to conduct the preliminary investigation or file the information, as the complaint did not solely pertain to the recovery of ill-gotten wealth.
• The Sandiganbayan, in resolutions dated June 11 and August 14, 1992, denied his motions, maintaining that the PCGG had the authority to investigate and proceed with the case.

Related Cases and Substantive Allegations

• Co-accused Fernando Balatbat, Jr. had previously moved to quash the amended information on similar grounds, a motion that was denied by the Sandiganbayan.
• Earlier cases and resolutions (including Cruz, Jr. vs. Sandiganbayan and Cojuangco, Jr. vs. PCGG) were cited by the petitioner to argue that the PCGG’s power was limited to cases involving the recovery of ill-gotten wealth.
• However, the information against Araneta III was later amended to strengthen the allegation that his gains through NETI and his relationship with the late President Marcos were instrumental in facilitating the ill-gotten wealth transaction.

Issue:

Jurisdiction of the PCGG

• Whether the PCGG had the authority to conduct a preliminary investigation and to file an information under the Anti-Graft and Corrupt Practices Act (R.A. No. 3019) in a case that predominantly involves alleged ill-gotten wealth.
• Whether the allegations of the information sufficiently demonstrated that the case fell within the ambit of the PCGG’s jurisdiction under Executive Order No. 1 and its subsequent amendments.

Abuse of Discretion by the Sandiganbayan

• Whether the Sandiganbayan committed grave abuse of discretion by denying petitioner Araneta III’s omnibus motion to quash the amended information or refer the case for further investigation by the Ombudsman.
• Whether the court’s ruling, which essentially equated the charge to being related to ill-gotten wealth, was in conflict with established doctrines set forth in earlier cases.

Interpretation of the Charge and Its Alignment with Requisite Elements

• Whether the elements alleged in the amended information (misleading the Boards of Directors, manifest partiality, and the acquisition of a significant portion of assets for an unusually low-paid-up capital) properly established the offense as part of the recovery of ill-gotten wealth.
• Whether the language and terminologies used in the information effectively aligned the ordinary graft charges with those that fall under the PCGG’s prosecutorial jurisdiction.

Ruling:

• (Subscriber-Only)

Ratio:

• (Subscriber-Only)

Doctrine:

• (Subscriber-Only)