The Philippine Deposit Insurance Corporation (PDIC) disclosed that the rehabilitation of the closed Export and Industry Bank (EIB) is faced with serious challenges since the requirements of stockholders and strategic third party investors for the rehabilitation of the bank have not been met.

EIB’s major stockholders raised the need for the consent of 100% of the creditors and depositors with uninsured deposits before they give their green light to the bank’s rehabilitation. The inability to obtain the required consents is a critical factor in the rehabilitation of EIB. The strategic third party investors interested in acquiring the bank also expressed their concern on the large percentage of non-consenting depositors and creditors. After numerous meetings with the depositors in various areas nationwide to explain the requirements for the rehabilitation of EIB, PDIC received the consent of only 48% of the bank’s creditors and uninsured depositors. Even after extending the deadline for submission of consents twice, the number of consents received vis-à-vis total number of creditors and uninsured depositors has not significantly changed.

The stockholders also expressed concern on legal issues arising from claims on assets of EIB by parties other than the bank’s depositors and creditors as of the date of the closure of the bank. The group of companies composed of Forum Holdings Corporation, East Asia Oil Company, Inc., Pacific Concorde Corporation, Mizpah Holdings, Inc., and Pacific Rehouse Corporation which is owned by William Gatchalian filed with the Court of Appeals a petition with Prayer for Issuance of Temporary Restraining Order (TRO) and/or Preliminary Injunction to prevent the rehabilitation of EIB. PDIC received said petition on November 22, 2012. This was after the case the said group of companies filed with the Makati Regional Trial Court was denied on October 19, 2012. Based on EIB’s records, it does not have any liability to these companies as of the date of closure of the bank.

PDIC Executive Vice President Cristina Q. Orbeta said that given recent developments, “The road to the rehabilitation of EIB is getting more and more difficult.” She said that they will have a meeting with stockholders and the interested investors to reassess the situation and determine what options, if any, may be taken to move the transaction forward. She emphasized that the role of PDIC in the bank’s rehabilitation process is just to facilitate the coordination among all the concerned parties. The decision on whether to proceed with the transaction, given recent developments, is really with the stockholders, the interested investors, the uninsured depositors and other creditors.

“The results of the meeting with stockholders and the interested investors will be the basis for the decision of the PDIC Board on the matter,” Orbeta said.

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