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PDIC declares failed bidding for rehab of Export & Industry Bank

The Bidding Committee constituted by the Philippine Deposit Insurance Corporation (PDIC) to oversee the bidding for the rehabilitation of closed Export and Industry Bank (EIB) declared today’s auction for Tranche 1 of the rehabilitation of the bank a failed bidding after no bids were received during the bidding.

Upon conclusion of the bidding, PDIC disclosed that it received a copy of a 72-hour temporary restraining order (TRO) issued by the Makati City Regional Trial Court enjoining defendants PDIC, Bangko Sentral ng Pilipinas and EIB and their officers, agents and representatives from proceeding with the sale of EIB’s assets, branches and commercial bank license on October 18, 2012.

The TRO was in relation to Civil Case No. 12-1010, entitled, "Forum Holdings Corporation, East Asia Oil Company, Inc., Pacific Rehouse Corporation, Pacific Concorde Corporation and Mizpah Holdings, Inc. v. Philippine Deposit Insurance Corporation, Bangko Sentral ng Pilipinas and Export and Industry Bank, Inc.

The PDIC said that it will file today an Urgent Motion to Dissolve and/or Lift the TRO and Opposition to Application for Preliminary Injunction filed by Forum Holdings Corporation et al. arguing that the RTC had no jurisdiction to issue the TRO and preliminary injunction and that the court was patently in violation of the Rules of Court and jurisprudence. PDIC further cited that the plaintiffs have no clear and unmistakable right over EIB’s assets, branches and commercial bank license to be entitled to injunctive relief and that there was no extreme urgency in the ex parte issuance of the TRO.

The PDIC added that after a successful bidding for the rehabilitation of EIB, consents of stockholders, depositors and creditors have to be obtained. After which the requisite PDIC and Monetary Board approvals should be obtained. The PDIC earlier set a deadline of November 9, 2012 for the submission of depositors’, creditors’ and stockholders’ consents.

Meanwhile, the PDIC said that it will continue to pursue options for the rehabilitation of EIB for the benefit of depositors and ordinary creditors.

Tranche 1 was intended for the sale of the assets and liabilities of EIB, as well as its 50 branches and additional 30 branches, all in restricted areas. The bids would have represented the amount the qualified bidder will pay for the uninsured deposits and other ordinary credits of EIB.

After a successful bidding, the consent of majority of stockholders; consent of all creditors and uninsured depositors; and approval of the PDIC and BSP have to be obtained to complete the rehabilitation of EIB.

PDIC said that the implementation of Tranche 1 is a requisite for Tranche 2 to proceed. Tranche 2 of the rehabilitation will be for the sale of EIB’s commercial banking license.

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The Philippine Deposit Insurance Corporation (PDIC) was established on June 22, 1963 by Republic Act 3591 to provide depositor protection and help maintain stability in the financial system by providing permanent and continuing deposit insurance. Effective June 1, 2009, the maximum deposit insurance coverage is P500,000 per depositor. All deposit accounts by a depositor in a closed bank maintained in the same right and capacity shall be added together. A joint account shall be insured separately from any individually-owned deposit account.

PDIC news/press releases and other information are available at the website, www.pdic.gov.ph.

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