G.R. No. 237558 - Teves vs. Office of the Ombudsman

On March 2, 2007, the Department of Finance's Privatization Management Office offered Land Bank participation in a block sale of 29% government-owned Meralco shares aimed at enhancing sale value.
On March 13 and 16, 2007, Land Bank's officers sought and obtained board approval to join the block sale, which later stalled as other government entities already sold their shares.

On November 7, 2008, Land Bank executives Halog and Vergara proposed selling 4% of Land Bank's Meralco shares (46.597 million shares) at PHP 90.00 per share, potentially yielding PHP 4.193 billion plus interest.
The board approved the proposal on November 10, 2008, authorizing President and CEO Gilda Pico to negotiate and execute the Share Purchase Agreement (SPA).
On December 2, 2008, Pico entered into the SPA with Global 5000 Investment, Inc. (Global 5000).

Meralco shares were levied upon on November 28, 2008, and transferred to satisfy a just compensation award to Federico Suntay; shares in Land Bank's name were cancelled, new shares issued to Suntay's assignee.
On December 14, 2011, the Supreme Court restored Land Bank's ownership of the Meralco shares.
On July 3, 2014, Global 5000 filed for specific performance against Land Bank.

On November 6, 2014, the Office of the Ombudsman (via Field Investigation Office) filed complaints against Teves et al. and Global 5000's board for violating Sections 3(e) and 3(g) of RA 3019.
The allegations included entering into a contract without public bidding and an unsecured transaction involving over PHP 4.193 billion without due diligence on Global 5000's financial capability.
Specifically, Global 5000's capitalization of PHP 62.5 million was only 17.67% of its 20% down payment obligation, raising doubts about its capacity.

On October 21, 2015, the Ombudsman found probable cause only for violation of Section 3(g), not 3(e), dismissing charges due to non-consummation of contract and lack of evident damage.
The Ombudsman ruled the non-implementation of the SPA immaterial; the offense is the entering into a manifestly disadvantageous contract.
The board’s alleged failure to exercise utmost diligence in transacting with a recently formed Global 5000 was cited.
Anomalies noted included the extension of down payment period, rights to dividends and voting rights contingent on partial payment, and grace periods for installments with low interest rates disadvantaging Land Bank.

Land Bank officers including Teves filed petitions assailing the Ombudsman's findings citing good faith and sound business judgment.
They referenced a DOJ Opinion confirming the SPA was not grossly disadvantageous, noting the PHP 90.00 share price exceeding the market value of PHP 57.00 at contract signing.
They argued the SPA was never consummated and that the Arias doctrine protecting good-faith reliance should apply.
Ombudsman maintained that the specific performance case was not a prejudicial question and that the SPA's legal nullity did not absolve liability.

Petitioners highlighted thorough market analyses, risk management, and approval processes, asserting the SPA yielded a premium and protected Land Bank interests.
They claimed the Ombudsman overstepped by substituting its judgment for the board's business discretion.
The Ombudsman argued the low capitalization and lack of due diligence justified probable cause.
The Ombudsman contended the administrative dismissal was irrelevant in considering probable cause.

Petitions consolidated with arguments and filings spanning from 2018 to 2021.
The issues presented were the existence of probable cause for RA 3019 violation and whether the contract was manifestly disadvantageous.

Whether the Office of the Ombudsman gravely abused its discretion in finding probable cause against the Land Bank officers for violation of Section 3(g) of Republic Act No. 3019.
Whether the Share Purchase Agreement executed with Global 5000 was grossly and manifestly disadvantageous to the government.
Whether the Arias doctrine on good faith reliance applies to the Land Bank officials.
Whether the existence of pending litigation on specific performance poses a prejudicial question requiring suspension of the Ombudsman proceedings.