Supreme Court issues TRO vs. Legacy banks



It is reported that the Bangko Sentral ng Pilipinas (Central Bank of the Philippines) successfully secured with the Supreme Court last week a Temporary Restraining Order (TRO) on enforcement of lower court rulings that favored several banks under the Legacy Group.

According to the story:

The high tribunal’s decision effectively gives banking regulators the green light to act on adverse findings made during their last examination of the 10 financial institutions scattered around the country.

The financial institutions covered by the ruling are Rural Bank of Parañaque Inc., Rural Bank of San Jose (Batangas) Inc., Rural Bank of Carmen (Cebu) Inc., Pilipino Rural Bank Inc., Philippine Countryside Rural Bank Inc., Rural Bank of Calatagan (Batangas) Inc. (now Dynamic Rural Bank), Rural Bank of DARBCI Inc., Rural Bank of Kananga (Leyte) Inc. (now First Interstate Rural Bank), Rural Bank of Bisayas Minglanilla (now Bank of East Asia), and San Pablo City Development Bank Inc.

Except for San Pablo City Development Bank, all were found by central bank examiners to be undercapitalized during their latest audit done on July 31, 2007. They were found to have an aggregate capital deficiency of P2.5 billion. The banks all operate under the aegis of the Legacy Group, which is primarily involved in selling pre-need plans.

PMT Forum members, especially those who made deposits with the affected banks, are currently speculating what will happen to the banks and their deposits.

Says PhilKiyosaki:

I think the banks can make it as they have been freshly infused now with new capital this year. What the BSP is fussing about is the last July 2007 audit and quite dated. But there and then again, they wanna verify and see to it that it won’t happen again this time so they are all auditing the banks as of this last quarter of the year. The SC will have the final say again when the TRO will be lifted and I believe after a successful audit.

Says richpulubi:

After reading it this morning, I called the head office. They said they will fight it (I guess a motion for reconsideration?). Anyway, wait and see na lang tayo! Initially, I had an urge to go to the banks to withdraw, but that would forfeit all interest. So I decided to let BSP and PDIC decide then if it closes, in my past experiences, PDIC will reimburse us anyway… so, no worries!

Says segurista:

The way I see it, Legacy is prepared for the worst case scenario if you will study the following:

1. Legacy plans… moratarium issue
2. Release of the 3 months short-term time deposit product
3. Addition of 2 more Legacy rural banks
4. Negotiation for some more rural banks

So mga kasama, just relax. The way i see it, Legacy has prepared for the worst case scenario at ang resulta ay mararamdaman sa mga susunod na araw. At this stage, I do not see PDIC  … I will not yet jump the ship. Legacy will be able to make it to shore. What i cannot guarantee is the long term effect of this once thay have surpassed this great challange.

Your thoughts on the issue? Post them in the following discussion threads:

  1. High court favors BSP vs. Legacy banks
  2. High interest time deposits in Legacy Financial Group’s rural banks

Related readings:

  1. Swindling and fraud issues hound Legacy Group and Rural Bank of Paranaque
  2. Experiences investing in double-your-money programs in the Philippines
  3. List of banks offering double your money investments

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12 thoughts on “Supreme Court issues TRO vs. Legacy banks”

  1. Hi Guys,

    I and many other friends of mine have investments with Legacy, investments that have not paid out since the end of September !!! Although I myself did get paid in cash from the Surigao Office.
    The story we are being fed is that Legacy is changing it’s bank from East West Bank to Banco de Oro because of better security in the current financial climate. I and many of my friends have had cheques bounce in the last month, ie those due for payment at the end of November. When I queried this with the manager of the Surigao branch, he told me that the chairman had impossed a two month monetorium on payments (frozen all payments until the end of January).

    The question I have to ask is, are we being fed a load of BULL S***….???? If so what is the correct procedure to follow now …? or do we all kiss goodbye to our investments…???

    Regards from a very dissapointed Welshman 🙁

    Reply
  2. I was wondering , why do they have to tell us that they were hit by the global crisis ? There investors have the right to know what’s happening , the least they can do is tell us , anyway if investors withdrew their investments almost 50% of their total investments are lost , Legacy still gains. I do not believed that they didn’t see this coming , I know that before they go through this kind of business , they thought of this scenarios. I’m also wondering why the Banko Sentral did not have the consideration of letting the public know what’s going on , the least they can do is let the public know so that the investors can do something before it’s too late . I hope they can see what’s going on , and let it be in their conscience that the investors of Legacy Group of Companies , is having a hard time now , specially those who’s everyday lives depends on what they get from their investments.

    Reply
  3. I know that the Legacy Group will surpass this problem , but to be fair , I think their agents should be professional enough to be nice to their investors, if not for the investors they’ll not be where they are now.

    Reply
  4. Yes I agree totally, in fact I emailed BSP to enquire as to what was going on & explaining that many people here in Surigao are in major financial crisis.
    The reply is listed below, although I have to ask myself why they even bothered…?

    Dear Sir/Madam:

    The BSP acknowledges receipt of your electronic mail. However, due to numerous requests/inquiries received by the BSP mail daily, answers to these will be made on a first in first out basis.

    Thank you for your kind understanding.

    BSP Webmaster

    Reply
  5. wow , what a reply from BSP, these people really love some individuals to suffer. I wonder what will they do if the Banks concerned are going to closed? Even if their re audit passed? Where can the investors seek for help? Will there be help?

    Reply
  6. Here this out , the Legacy Group of company decided to closed since Monday. And planning to start selling all its assets, so they can pay back their investors. At first they told us that they are giving back the initial investments ,but it will take a long time, so the investors have to wait cause it will be a very long process. Those who has CTD can claim their investments in PDIC, sad thing for those who holds checks cause they have to claim it in court. This is the idea of Legacy’s christmas gift to all their investors. I hope the chairman and all the employees knows what they are doing and what they are giving to their investors. And may they have a great christmas and peaceful sleep every night, until they’ve return the last centavo they owe to the investors.

    Reply
  7. if there is anything that can be done to recover our investment, please do tell us how. i hope the chairman will come out with a clear guidelines or instructions for all its depositors. thank you

    Reply
  8. for those who holds CTD ( certificate of time deposits ) hope that the banks will close so you can get your investments back. for those who holds PDC ( post dated checks ) pray that the banks will reopen after they declare the “bank holiday”. the status of the Legacy Group for now is not yet disclosed , for what I can see , not any banks they own has declared closed, bank holiday just means they are rehabilitating, which I hope before the year ends they can give us the great news that they are back in business.

    Reply
  9. regarding the issue about the legacy group of company,i can say that the employees specially the executives of legacy are using the companies money.how they can explain that including the vice president of the company carolina hinola owns not one but several luxury cars.

    Reply
  10. there will be next for legacy! a rural bank that manage of a business woman who is visible in television in some link issue of an actor. CB watch that bank

    Reply

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