Get back P80m, water agency told

THE Audit Commission wants the Local Water Utilities Administration to take back the P80 million it advanced to acquire Express Savings Bank Inc. for P480 million, saying the deal is irregular.

The state-run water agency was one of the government agencies severely criticized by President Benigno Simeon Aquino III in his State-of-the-Nation Address for the excessive salaries they pay to their officials.

Audit Commission documents show that LWUA’s million in advance payment for its capital subscription to Express Savings Bank was not supported by any memorandum of agreement or certificates of investment that would protect the water agency.

“There are no terms of reference executed to provide protection to LWUA’s investment/advances in case the application for quasi-banking authority is disapproved by the [Bangko Sentral] or the amendment to the article of incorporation increasing the capital stock of [Express Savings Bank] is not registered by the SEC,” the commission says.

“We recommend the return of the initial investments of P80 million and the P400 million additional infusion of capital with the [bank] pending the approval of the [Bangko Sentral]/ Securities and Exchange Commission/Office of the President.”

LWUA bought 60 percent of the common shares of Express Savings Banik for P80 million in June 2009. The Laguna-based bank is under the central bank’s prompt corrective action plan, which means it will require additional capital and strict governance to be stronger.

Eileen Mencias, Manila Standard Today