State-run Government Service Insurance System has failed to sell its stake in GSIS Family Bank for the third time, the fund’s top executive said over the weekend.
GSIS president and general manager Robert Vergara said the bank would seek a court decision to allow it to post bond in a bid to protect the minority shareholders, after three failed consecutive deals.
Vergara said the bank tried to convince a Makati regional trial court to allow it to post the bond.
“We’re trying to convince the courts to allow us to post a bond to protect whatever interest the minority shareholder or claimer is being infringed by our sale, instead of taking a very slow process,” Vergara told reporters at the sidelines of the annual reception for the banking community at Bangko Sentral ng Pilipinas.
GSIS in October failed to sell its 99.5-percent stake in GSIS Family Bank for the third time.
GSIS investment bids and awards committee declared the failure of the new round of negotiated sale for the thrift ban in Advisory No. 03-2015 posted on its Web site on Oct. 12.
“The committee declared the failure of negotiated sale of all GSIS shares in GSIS Family Bank since no party fully complied with the requirements, as published on Sept. 11, 2015,” GSIS IBAC chairperson Severina Resurrection said.
Interested buyers of the bank needed to submit a detailed plan in rehabilitating GSIS Family Bank. They also need to buy the remaining 0.5 percent of the bank belonging to private stockholders, represented by the heirs of former Cavite Rep. Renato P. Dragon through a separate transaction.
“Rather than continue a process that will not result in a viable buyer, then we’re thinking that maybe we should attack it from a different perspective and work with the courts to see what it is that the minority shareholder wants, and if they believe that there are some value there they will lose, for the courts to decide what the value is and put up a bond,” Vergara said.
The bank has been up for sale since 2006 and was targeted to be sold in the first semester of 2015, but a restraining order from the Makati regional trial court stopped the transaction. The order was lifted in March.
GSIS Family Bank was the former Royal Savings Bank, established as a private bank 40 years ago by the Dragon family of Cavite. It later became known as Commercial Bank of Manila and ComSavings Bank.
Under the Bangko Sentral ng Pilipinas Monetary Board Resolution No. 224, the winning offeror will enjoy incentives such as opening additional 20 branches and relocating 12 of existing 22 branches anywhere in the country (including restricted areas) and accepting government deposits from GSIS subject to the approval of the secretary of the Finance Department.
From a mid-sized bank, it can also be converted into a commercial bank with authorization to engage in expanded foreign currency deposit unit and trust and quasi-banking functions.
It can also continue to accept government deposits from GSIS and the municipalities of Cavite, unless Bangko Sentral revokes such authorities.