The Sandiganbayan Fourth Division on Wednesday issued a hold departure order (HDO) against Senator Sherwin Gatchalian, the members of his family, and 21 others as they face a criminal case involving the allegedly anomalous buyout of an insolvent bank by the Local Water Utilities Administration (LWUA) in 2009.

The court issued the HDO barring the travel of Gatchalian, his parents and siblings, and former LWUA chair and now Surigao Del Sur representative Prospero Pichay Jr. over the case.

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Senator Gatchalian’s father, so-called “Plastics King” William Gatchalian, mother Dee Hu Gatchalian, and siblings Kenneth Gatchalian and Weslie Gatchalian were among those included in the court’s HDO ordering the Bureau of Immigration to bar them from traveling abroad unless they secure a permission from the court.

READ: Senator Gatchalian posts bail in bank buyout case

Each of them stand accused of one count of violation of Section 3(e) of Republic Act No. 3019 or the Anti-Graft and Corrupt Practices Act, one count of Malversation of Public Funds as defined under Article 217 of the Revised Penal Code, and one count of violation of the Manual of Regulation for Banks (MORB).

They have all posted their bail bonds.

READ: ‘Plastics King’ Gatchalian posts bail in anomalous bank buyout deal

“The Bureau of Immigration and Deportation is hereby directed to bar/prohibit the above-named accused from leaving the Philippines for any destination abroad, either by air or sea transportation, except by prior written permission duly secured from and granted by this court,” the Sandiganbayan said in the HDO.

The Gatchalians were charged as executives of Wellex Group Inc. owned by the patriarch William Gatchalian, who earned the moniker “Plastics King” for leading the local plastics business in Valenzuela, the turf of the influential family.

Meanwhile, Pichay was charged with three counts of graft, three counts of malversation, one count of violation of MORB and one count of violation of Republic Act 8791 or General Banking Law of 2000, for leading the purchase by LWUA of the insolvent bank to save it from the brink of bankruptcy. He has yet to post bail.

The insolvent bank Express Savings Bank Inc., (Esbi), a local thrift bank based in Laguna owned by the Gatchalian family, is co-owned by the Wellex Group Inc. (WGI) and Forum Pacific Inc. (FPI). Weslie Gatchalian, who succeeded Sherwin in the Valenzuela congressional district, was also an FPI executive.

READ: Gatchalian, Pichay face criminal raps over bank buyout

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According to the Ombudsman, Pichay and other LWUA officials approved the acquisition of the insolvent bank in 2009 despite audit findings that show that the bank suffered net losses and capital deficits for five straight years from 2005 to 2009.

The acquisition took the effect of a financial rescue, as the LWUA officials bought 445,377 Esbi shares worth P101.363 million from the Gatchalian group that gave the agency 60-percent equity in the bankrupt bank.

Pichay and the other officials later injected P780 million LWUA funds to the bank to increase its authorized capital stock.

The Gatchalians of Wellex and other owners of the bank were also paid P80 million in the acquisition.

READ: Gatchalians say raps a political vendetta

The LWUA made the acquisition and transactions despite warnings by the Bangko Sentral ng Pilipinas (BSP), the Monetary Board of the BSP, and the Department of Finance (DOF) about the Esbi’s fragile financial condition following a due diligence review that showed high liquidity and credit risks.

The acquisition was also made without the requisite regulatory approvals from the BSP, its Monetary Board, the DOF and the Office of the President.

In ordering the filing of charges to the Sandiganbayan, Ombudsman Conchita Carpio Morales said “in view of the bank’s precarious financial standing at the time of the sale, the windfall received by herein private respondents must be deemed unwarranted benefit, advantage or preference.”

READ: Winning senator Gatchalian indicted over anomalous bank deal

The following accused were also issued an HDO in connection with the case–former LWUA officials Eduardo Bangayan, Aurelio Puentevella, Enrique Senen Montilla III, Wilfredo Feleo, Daniel Landingin, Arnaldo Espinas; Wellex executives Elvira A. Ting and Yolanda de la Cruz; FPI executives Arthur R. Ponsaran, Geronimo Velasco Jr., Peter Salud, Rogelio D. Garcia, Lamberto Mercado Jr., Joaquin Obieta and Evelyn de la Rosa; and Esbi executives George Chua, Gregorio Ipong, Generoso Tulagan, Wilfred Billena, and Edita Bueno. CDG

READ: Pichay, 5 Gatchalians sued

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