Title
Presidential Ad Hoc Fact-Finding Committee on Behest Loans vs. Desierto
Case
G.R. No. 135715
Decision Date
Apr 13, 2011
A case involving alleged behest loans to MINCOCO, with claims of cronyism and Marcos-era intervention, dismissed by the Ombudsman but overturned by the Supreme Court due to grave abuse of discretion and improper application of prescription rules.
prescriptive period
charges
violation
A

Case Digest (G.R. No. 135715)

Facts:

  • Parties and their respective positions in the transactions complained of
  • Respondents Mohammad Ali Dimaporo, Abdullah Dimaporo, and Amer Dianalan were stockholders and officers of Mindanao Coconut Oil Mills (MINCOCO), a domestic corporation established in 1974.
  • Respondents Panfilo O. Domingo, Conrado S. Reyes, Enrique M. Herboza, and Ricardo Sunga were officers of the National Investment and Development Corporation (NIDC).
  • Petitioner was the Presidential Ad Hoc Fact-Finding Committee on Behest Loans, represented by Magdangal B. Elma, PCGG Chairman, and Orlando C. Salvador as consultant of the technical working group of the ad-hoc committee.
  • Public respondent was Ombudsman Aniano A. Desierto (Ombudsman).
  • MINCOCO’s applications and NIDC’s approvals for guarantee loan accommodations
  • On 10 May 1976, MINCOCO applied for a Guarantee Loan Accommodation with NIDC for approximately P30,400,000.00.
  • NIDC’s Board of Directors approved the accommodation on 23 June 1976.
  • The guarantee loan was described as under-collateralized and undercapitalized because MINCOCO’s paid capital was P7,000,000.00 and its assets were worth P7,000,000.00.
  • MINCOCO nonetheless obtained additional Guarantee Loan Accommodations from NIDC in the amounts of P13,647,600.00 and P7,000,000.00.
  • The alleged intervention by President Marcos and its purported effect
  • When MINCOCO’s mortgage liens were about to be foreclosed by government banks due to outstanding obligations, Eduardo Cojuangco issued a memorandum dated 18 July 1983 bearing President Ferdinand E. Marcos’ marginal note.
  • The marginal note led to the disallowance of the foreclosure of MINCOCO’s properties.
  • The government banks were unable to recover any amount from MINCOCO.
  • The marginal note was construed by NIDC to have effectively released MINCOCO, including its owners, from all financial liabilities.
  • Discovery and creation of the Presidential Ad Hoc Fact-Finding Committee on Behest Loans
  • The described transactions were discovered only in 1992.
  • In that year, President Fidel V. Ramos issued Administrative Order No. 13 creating the Presidential Ad Hoc Fact-Finding Committee on Behest Loans with the Chairman of the PCGG as head.
  • The committee was directed, among others, to inventory behest loans and identify lenders and borrowers, including principal officers and stockholders of borrowing firms, and persons responsible for granting loans or influencing the grant.
  • President Ramos later issued Memorandum Order No. 61 outlining criteria for determining a behest loan, including:
1) under-collateralization; 2) under-capitalization; 3) direct or indirect endorsement by high government officials, including presence of marginal note; 4) identification of stockholders, officers, or agents as cronies; 5) deviation of use of loan proceeds from intended purpose; 6) corporate layering; 7) non-feasibility of the project; 8) extraordinary speed in loan release.
  • The committee found that twenty-one (21) corporations, including MINCOCO, obtained behest loans.
  • The committee claimed that MINCOCO’s facts showed badges of behest loans, namely:
1) MINCOCO was under-collateralized and undercapitalized; 2) its officers were identified as cronies; 3) Marcos’ marginal note effectively waived the government’s right to foreclose MINCOCO’s mortgage liens; 4) approval of the Guarantee Loan Accommodations in an extraordinary speed of one month.
  • Filing before the Ombudsman and the Ombudsman’s dismissal in OMB-0-97-1718
  • The committee filed a sworn complaint with the Ombudsman against MINCOCO’s officers and NIDC’s Board of Directors for violation of Section 3(e) and (g) of Republic Act No. 3019, as amended.
  • By Resolution dated 9 July 1998, the Ombudsman motu proprio dismissed the complaint.
  • The Ombudsman stated two grounds:
1) insufficiency of evidence to warrant indictment; and 2) prescription.
  • The Ombudsman’s evidentiary reasoning included:
1) undercapitalization “standing alone” was meaningless; 2) loan approval was allegedly based on sound lending practice; 3) if MINCOCO’s equity was more than the amount of the loans, additional borrowing would allegedly be unnecessary; 4) the allegation that Mohammad Ali Dimaporo was a crony of late President Marcos was allegedly unsupported by evidence and remained a bare allegation; 5) the Marcos marginal note was treated as endorsing the recommendation regarding mortgage liens of mothyballed coconut oil mills, not the approval or grant of loans or guarantees in 1976; 6) it was treated as approving release of liabilities of former owners, not acquisition of the loans or guarantees; 7) takeover of MINCOCO by UNICOM without NIDC consent was characterized as a mere procedural violation that allegedly did not warrant criminal action.
  • The Ombudsman’s prescription reasoning included:
1) the loans/guarantees were app...(Subscriber-Only)

Issues:

  • Procedural issue on the proper mode of review of the Ombudsman’s dismissal
  • Whether the Court should treat the petition filed under Rule 45 as a petition under Rule 65, considering the allegations of grave abuse of discretion.
  • Substantive issue on prescription
  • Whether the Ombudsman correctly dismissed the complaint on the ground that the offenses had prescribed, considering:
1) the period of prescription for violations under R.A. No. 3019; 2) the date when prescription started to run; and 3) whether prescription was subject to interruption or later commencement under governing rules.
  • Whether Section 15, Article XI of the 1987 Constitution bars prescription in the context of criminal proceedings for acts involving behest loans.
  • Substantive issue on the Ombudsman’s finding of insufficiency of evidence at the level of preliminary investigation
  • Whether the Ombudsman gravely ...(Subscriber-Only)

Ruling:

  • (Subscriber-Only)
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