Legacy owner blames BSP, media, global crisis for woes
By Joanna P. Los Baños
Inquirer Southern Luzon
STO. DOMINGO, ALBAY–INterference by regulators, unfair media reporting, extortion, and adverse global economic developments are among the factors that led to the closure of the rural banks of Legacy Group, according to its chair emeritus Celso de los Angeles Jr.
“I have a story to tell. I have the records to show,” he said in an interview with the Inquirer at his Black Sands Beach Resort in Barangay Calayucay here late Sunday afternoon.
De los Angeles, mayor of this town, was given the honorary title chair emeritus as founder of the Legacy Group.
He admitted that what happened to his companies was “very painful.”
“But it would be criminal for me to continue, knowing that I would not be able to deliver,” said De los Angeles, a graduate of Asian Institute of Management and great-grandson of Laureano Guevara, the Marikina mayor who established the Marikina shoe industry in 1887.
“So when I knew that it was impossible already. I had to cut it,” he said.
De los Angeles said a lot of people questioned his decision, asking why it was so abrupt.
“Because by continuing it further, I would put an innocent investor at risk, take his money, knowing that there is no more chance for me to return it. That is criminal,” he said.
The Bangko Sentral ng Pilipinas (BSP) ordered 13 insolvent rural banks of the Legacy Group closed a few days before the Christmas break last December.
The BSP found that the rural banks had failed to fully service withdrawals and had engaged in unsafe and unsound practices.
Interference
The rural banks held a combined P14.03 billion in insured deposits in 132,642 bank accounts that each held amounts at or below the P250,000 limit of Philippine Deposit Insurance Corp.
De los Angeles said that because of the interference by regulators, Legacy was not allowed to implement its business plans.
“Why do we have credit cards? Legacy motors? Real estate companies? Because these are the outlets. That in itself, the entire corporation of the Legacy Group, is proof of the business plans that we have,” he said.
Panic
De los Angeles said media reports also created fear and panic among his investors.
He said that in August 2008, newspapers started publishing stories “with propositions like ‘anticipating massive withdrawals’ … ’should the banks close.’”
He said these stories credited the BSP as their source.
“But the BSP did not deny. They have a duty to come out and say ‘no, we are not the source of the false information,’” De los Angeles said.
As a result, “people believed the newspapers and panicked.”
“And any bank subjected to this, will fall,” he said.
Extortion
“Some people think that we are oozing with money, they made a career at extorting money from me,” De los Angeles said, adding that he would disclose the names of the extortionists at the Senate.
He appeared at a Senate hearing on preneed companies yesterday.
In June and July last year, he said the extortionists engaged in black propaganda saying that he was a murderer, that he was relieved of his chairmanship of National Home Mortgage Corp. because he took money from it, that his banks were closing any time–”little things that could shatter your trust.”
“I was made an ATM. Borrow one million, then special audit. That was what they did every time they needed money. If not, they would harass [me],” he said.
“Then finally, they made a proposal: Hire us as consultants and we would make all your problems go away,” De los Angeles said.
He said the bankruptcy of Lehman Brothers last September and other adverse global economic developments created more fear among Legacy investors and officers.
Nograles
Asked if he was a friend of House Speaker Prospero Nograles, the Legacy Group founder said he had many friends.
“But it doesn’t necessarily mean that they would intercede for me,” De los Angeles said, adding that he knows where to draw the line.
“Assuming Ric Tan was telling the truth that Nograles was backing me up, the Vice President was backing me up, do you think I would find myself in this situation?” he said.
“Why was I not able to get an emergency loan, not even P50 million? Do you think if that was true, my banks would be closed at this time?” he said, referring to Ricardo Tan, former PDIC president.
De los Angeles said that if it were true, then he would not have any problems now.
Dinner
He said Nograles had investments like those of other investors, but had no single share.
“I pity him for being dragged into this. He doesn’t deserve that kind of attack,” De los Angeles said. “The truth is, he is also a victim because he still has an investment with me, which I have not yet paid.”
De los Angeles denied that he had dinner in 2005 at the Edsa Plaza Shangri-La Hotel with Tan, Nograles and George Regalado.
Tan had claimed that Nograles asked him to go easy on the PDIC probe of the Legacy rural banks because of De los Angeles’ ties with several administration allies.
“Why would I talk to Ric Tan when he was not with the BSP, and I did not have any closed banks at that time?” De los Angeles said.
Without due process
De los Angeles said he was “judged without being accused, without due process.”
BSP officials went on an “interview spree” talking about the Legacy issue, according to him.
“Never mind that one is presumed innocent until proven guilty. That is nothing to them. Basta De los Angeles, guilty,” he said.
He clarified that the double-your-money plan offered by Legacy rural banks was not a Ponzi scheme.
“Those who are bankers will know that a depositor will go to one teller and after 30 minutes, that money will be given to teller No. 2 and will be used to pay the withdrawal of another depositor,” he said.
“The difference between a Ponzi [scheme] and a bank is, a bank has an authority to solicit deposit, while Ponzi did not,” he said.
Double your money
He said the Legacy Group had business plans from the very start. “And we have corporations that are highly regulated and closely monitored by authorities.”
De los Angeles said those saying that the double-your-money scheme was unsound were only looking at one side of the coin. “You have to look at the outlet. It becomes unsound if you do not have an outlet,” he said.
De los Angeles said the double-your-money concept was not unsound in itself.
“It was not invented by me. Many big banks have double-your-money schemes. The question is what is the outlet?” he said.
He said the question was: “Can your outlet pay for double-your-money?”
If the business plan shows that it can, it’s not unsound, according to the Legacy Group founder.
Blame
De los Angeles said his associates and executives were claiming that one reason the Legacy Group collapsed was his turning his back on it.
“Even if I had to turn back the time, I would not change a thing and still choose to serve Sto. Domingo,” he said.
He said he had not been involved with the operations of Legacy since he became mayor of the town in 2007. “When I left Legacy, it was very healthy,” he said.
De los Angeles noted that most of the depositors were insured by PDIC. “If PDIC does its job, they will be paid,” he said.
“Jueteng”
De los Angeles denied that he was involved in “jueteng,” an illegal numbers game.
He was earlier tagged by former Ilocos Sur Gov. Luis “Chavit” Singson as one of the jueteng collectors of former President Joseph Estrada.
The Legacy Group founder said the only thing that linked him to jueteng was a check he gave to Atong Ang, a former gambling partner of Estrada.
De los Angeles said that at that time, he had just arrived from the United States and his business was lending.
“Atong Ang was one of my clients. I would give him a check and he would give me a postdated one, including the interest,” he said.
He said maybe at that time, Ang was remitting money to the former President and the check was given to Estrada.
“I’m in the business of lending and I don’t know what they do with the money,” he said.
De los Angeles said he was one of those who led in the campaign against jueteng and “that’s also why I’m being threatened in Albay.”
