One thousand peso bill. Photo by Philstar
One thousand peso bill. Photo by Philstar

Manila, Philippines – Businessman Benito Ramon Araneta, accused of misappropriation of nearly P230 million which caused the bankruptcy of LBC Development Bank, was arrested in Ayala Alabang subdivision in Muntinlupa City on Tuesday at around 4:10pm.

The arrest warrant for Araneta, who is facing 15 counts of estafa and was not allowed to bail, was issued on Aug. 1, 2011 by the Makati City Regional Trial Court.

Reports said that Araneta allegedly conspired with former LBC Development Bank president Ma. Eliza Berenguer who authorized the P229.5-million load even without collateral and said the loan has been paid.

“Araneta was able to borrow money totalling P229, 469,505.10. In collusion with Berenguer, he was able to appropriate the money for his personal use,” PNP spokesman Chief Supt. Reuben Theodore Sindac quoted the results of the investigation of Philippine Deposit Insurance Corp. (PDIC)

“During the stint of Berenguer as president, it was shown that Araneta already paid the loan, but in fact, he never returned the money he borrowed from LBC Bank,” Sindac added. “This is unsafe and unsound bank practices that resulted in the damage of undetermined number of depositors of their hard-earned money.”

PDIC took over the LBC Bank’s assets and liabilities in September 2011.

PDIC posted a statement on its website saying their complaint in the Department of Justice (DOJ) accuses “Berenguer of directly instructing the principal officers of LBC Bank to divert funds of the bank to deposit accounts owned by Araneta and five other borrowers from October 2006 to January 2008.”

PDIC filed the estafa case against Berenguer, Araneta, Ma. Lourdes Senn, Ernesto G. Barrios, Charito S. Zambales and Francisco A. Climent for misappropriating the LBC Bank funds.

The Monetary Board of the Bangko Sentral ng Pilipinas (BSP) said that the LBC Bank was plagued with liquidity problems.

As of now, Araneta, who did not resist the arrest, is detained with the PNP Intelligence Group.

The case filed by PDIC is being handled by Makati Regional Trial Court Branch 143.


Reinalore P. Guimbaolibot

LNU ABCom Intern

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