Philippines bank at heart of Bangladeshi bank heist says it might repay funds

rcbc-lorenzo-tanThe Philippines bank at the center of the great Bangladeshi Bank Heist of ’16 says it’s prepared to comply if the Philippines government orders the bank to make up some of the Bangladeshi losses.

On Tuesday, Philippine senators held their latest public hearing into February’s digital theft of $101m from Bangladeshi central bank accounts at the Federal Reserve Bank of New York. Around $81m of this stolen cash ended up in the accounts of a Rizal Commercial Banking Corporation (RCBC) branch in Manila before spreading through the local casino industry.

So far, junket operator Kam Sin ‘Kim’ Wong has returned close to $5.5m of the cash that two Chinese junket agents transferred to various accounts at the Solaire Resort and Casino and the Midas Hotel casino.

Wong has also offered to hand over nearly $10m he claims to have received from one of the junket agents as repayment for a personal debt. Wong further claimed that another $17m was still in the hands of local remittance firm Philrem Services Inc, a claim that Philrem execs continue to deny.

On Tuesday, RCBC CEO Lorenzo Tan (pictured) told senators that if his company was “found liable” for having failed to exercise proper due diligence in ascertaining the legitimacy of the funds that flowed through the bank, he would “recommend to the board to set aside certain money,” although Tan stopped short of saying RCBC would ensure that the Bangladeshis could recoup the full $81m.

According to one senator’s math, Tan’s vow could leave RCBC on the hook for around $50m in payments to the Bangladeshi bank. quoted Sen. Ralph Recto helpfully suggesting that if RCBC were to make the Bangladeshi bank whole, perhaps RCBC’s “market price would improve from what it used to be.”

RCBC has come under fire for transferring the funds to Philrem despite the Bangladeshi bank sending RCBC several “stop payment’ orders alerting them to the theft. RCBC branch manager Maia Santos-Deguito has been singled out for permitting the withdrawals but she has pointed the finger back at RCBC top execs, claiming to be a fall guy/gal, leading Tan to file a civil suit against Deguito.

Meanwhile, Philrem president Salud Bautista was back in the hot seat on Tuesday, with one senator calling her credibility “very, very low” after she claimed a subpoenaed Philrem staffer was still too sick to appear in person at the hearing. The investigation has since turned up evidence suggesting Philrem was not actually registered with local tax authorities as a remittance agent, so Philrem’s problems are just beginning.

Finally, Macau-based junket operator SunCity Group, which has been identified as having handled some of the purloined cash, says it will provide the Senate with a full accounting of its transactions with the individuals under investigation. SunCity lawyer Francis Aguilar requested and was granted one week in which to prepare the report.

The next Senate hearing on the scandal is scheduled for April 19.