State-run Land Bank to lose P2 billion in asset from plunder in bankrupt PICOP in Bislig City

March 7, 2023

State-run Land Bank of the Philippines (LBP) stands to lose P2 billion in mortgaged properties from the bankrupt Paper Industries Corp. of the Philippines (PICOP) whose properties in Bislig City, Surigao del Sur have been under plunder by alleged impostor labor claimants.

PICOP, once the biggest pulp and paper mill in Asia that employed 20,000 but now under Securities and Exchange Commission (SEC) receivership, is bound to surrender its assets to LBP which has foreclosed these due to loan non-payment.

However, amid a Stay Order from the Makati Regional Trial Court (RTC) which stops PICOP from disposing of assets, impostor labor claimants have “illegally” executed a levy with auction on PICOP’s properties.

That is not only in violation of the Makati RTC Branch 149’s Stay Order aimed at preserving PICOP’s assets. Itt also causes undue losses to LBP, PICOP’s biggest creditor. Makati RTC Branch 138 also issued a Cease and Desist Order (CDO) against any collection of payment by creditors from PICOP.

In a letter to Finance Secretary Benjamin Diokno and Trade Secretary Alfredo Pascual, Francisco Buencamino, Makati RTC-appointed rehabilitation receiver of PICOP, said while he is “duty bound” to preserve PICOP’s assets, impostor labor claimants have started to ransack the properties.

Financial Rehabilitation and Insolvency Act of 2010 (FRIA-RA 10142) is complied with in the PICOP Stay Order (Section 20) and rehabilitation.

“Secretary Pascual is concerned that PICOP’s case is sending a bad signal to investors and the international community on the status of investments in the Philippines,” Buencamino said.

Buencamino has also sought the assistance of LBP President Cecilla C. Borromeo as PICOP’s major creditor that has the primary claim against its assets.

“Because the assets of this pulp and paper mill contain high value metal and steel parts, organized scrap metal buyers have become interested in converting the plant machinery and equipment into scrap materials, including building and construction materials of metal and iron for sale to smelters and other like-factories,” he said.

Buencamino earlier denied petitions from Labor Unions to grant them exemption from the Stay Order in order to pay off first legitimate claimants, primarily LBP.
By virtue of an Order of Levy, followed by a Writ of Execution from the National Conciliation and Mediation Board (NCMB) in Bislig City issued by Voluntary Arbitrator Jorge B. Quiban, a labor organization named AKPHRI-AWATU claimed exemption from the Makati RTC’s Stay Order.

AKPRHI-AWATU used to be represented by Joselito V. Soriano. But with Soriano now deceased, PICOP’s properties have been raided by unconfirmed labor group members. They were accompanied by an NCMB sheriff, Philippine National Police (PNP), and Criminal Investigation and Detection Group (CIDG)

“On August 24, 2020 the NCMB Sheriff, Mr. Kim Deloso, forcibly entered the PICOP premises along with PNP and CIDG personnel with hundreds of alleged union members to raid the buildings of PICOP to strip them of cables, metal parts of equipment and machinery, generators, and as much metal and scrap iron materials they could seize,” said Buencamino.

“This emboldened other parties to join in the fray of violating the Stay Order, and a certain Lorden Perspinan allegedly a winner in the auction together with his group possessed the paper mill complex and has been moving out PICOP’s properties”

While the national government has been planning for the rehabilitation and restoration of operation of PICOP, subsequent orders of Levy and Writ of Execution were issued by Labor Voluntary Arbiter Arnold G. Larena against PICOP’s properties.

These included new machinery and equipment that were intended to be installed as a replacement plant facility for the rehabilitation plan under FRIA.

These new properties are not owned by PICOP, but by third party investors interested in PICOP’s operational revival.

The ransacked properties are contained in 141 container vans already reported to the court as owned by investors, not by PICOP, with shipping documents in their names valued at more than P480 Million.

“The most recent Writ of Execution was issued on January 25, 2023 despite their knowledge that these were not assets of PICOP,” said Buencamino.

The rehabilitation of PICOP was supported by a Court of Appeals approval. However, LBP opposed this rehabilitation approval. The case has been elevated to the Supreme Court.

With the continuing raid on the properties, an Ombudsman complaint has since been filed against all the personalities “that showed connivance and conspiracy to commit ‘Robbery-in-Band’ against PICOP.” This is in order to reverse the “risk of dissipation of assets that the rehabilitation could have already started.”

“I have reported these illegal activities to Bislig Mayor Florencio Garay, the Bislig Chief of Police Colonel Michael B. Lozada, and PNP Chief PLTGEN. Vicente Danao Jr. But instead of stopping Perspiñan, they have assisted him. Mayor Garay and Col. Lozada issued Permits To Travel to the transporters of stolen cargo. We have these documents already submitted to the Ombudsman,” Buencamino said in his letter.

PICOP officials are no longer able to secure the assets as the labor group raiders are protected by armed guards even despite a gun ban during the elections.

“PICOP is a private property, but the PNP disregarded this and allowed hundreds of trespassers with oxy-acetylene equipment to cut metal all around the compound,” he said.

The labor raiders also bypassed an order dated May 27, 2022 by Department of Interior and Local Government Region 13 Director Lilibeth A. Famacion for Bislig Mayor Florencio Garay to maintain the status quo at PICOP.

“Worse, the Chief Legal Counsel of the Office of the Mayor, Atty. Neil Jao, continues to advise Mayor Garay to sign permits to transport loaded cargo even without authorized documents, evidencing connivance and openly disrespecting the Stay Order.”

The rehabilitation receiver also sought Interior and Local Government Secretary Benhur Abalos’s assistance to investigate and place in custody Lorden Perspinan (also known as Dennis of Dinesse Trading Company) and her associate a.k.a. and his associate Michael Espiritu.

They have “self-declared themselves as owners of all the assets of PICOP, disarmed the security of PICOP, and have taken over the compound.”

The sought aid also included a “suspension of Brig. Gen. Romeo Caramat Jr, Caraga Regional Director of PNP, PLCol Michael Lozada, Chief of Police of Bislig PNP so that the records at PNP can be adequately investigated.”

“The ‘Robbery-in-Band’ and plunder now committed has compromised our chances of recovery at very high risk, if not urgently addressed or stopped, and becomes a crime against the government, creditors, and Filipino investors numbering more than 12 thousand shareholders,” said Buencamino.

Anti Fencing Law charges have already been filed by Lawyer. Judd L. Anastacio, collaborating counsel for Buencamino, against the raiders and buyers that took truckloads that have exited the compound intended for sale to scrap buyers and to smelter factories.

“These deliveries are virtually stolen goods. These factory operators are equally guilty of acquiring recorded stolen goods which have all been blottered at the local PNP.”

Other charges have been filed with National Police Commission (Napolcom) against PBGen Joselito T. Esquivel Jr. Regional Director, PRO 13, Surigao del Sur; PLtCol. William M. Corpuz, Chief of Police of Bislig City; Col. Joseph B. Boquiren, Director, Surigao del Sur Police Provincial Office (SDSPPO); and Col. Michael B. Lozada, Chief of Police, Bislig City, Surigao del Sur.

Administrative and Plunder cases in the Ombudsman have also been filed against Garay, Deloso, Joselito Soriano, Cristina Caya, Rogelio Gador, and Joel Endonela. The same Plunder cases were filed for aiding AKPHOPE-UFW in the raud against Boquiren, Lozada, Geoffrey B. Cagakit, member, Sangguiang Panlungsod and counsel for AKPHOPE-UFW.

“The PICOP Security group was overwhelmed by the number of people (in the 100’s) who forced their way in with CIDG escorts and with protection from the Bislig PNP. Ingress and Egress privilege was accorded to the looters by the Police who claimed that they were under orders of the Mayor of Bislig,” he said. (Melody Mendoza Aguiba)

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