New GRMC chairman facing fraud charges in Philippines over parent company dispute

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Guam – The quarreling amongst family members at the Guam Regional Medical City’s parent company is now making its way to criminal court as the new board chairman faces fraud charges.

Last Monday, Manila prosecutor Rey Camilo Dumlao filed Estafa charges against Jose Xavier “Eckie” Gonzales and six other family members.

Gonzales is the nephew of ousted chairman and former CEO of The Medical City Dr. Alfredo Bengzon. Professional Services Incorporated, doing business as The Medical City is the parent company of GRMC.

According to the complaint, Gonzales and his alleged accomplices conspired with each other to “willfully, unlawfully and feloniously, defraud” complainant Alfredo Bengzon. Dr. Bengzon says the accused misrepresented the relationship between other shareholders which led him to increase the parent company’s capital stock and allocate shares to a Singaporean firm Viva Holdings.

That firm then allegedly partnered up with Gonzales companies to gain control of The Medical City. Bengzon says as a result of the fraudulent scheme, he lost his shares and was overthrown from the company.

Gonzales and five other co-defendants were arraigned Monday at the Pasig Regional Trial Court and were released on bail. Two other defendants are scheduled to be arraigned in March.

The criminal case against Gonzales comes in the wake of a ruling by the Philippines’ Securities and Exchange Commission which found Gonzales and his partners to be in violation of provisions of the Securities Regulation Code.

Gonzales, meanwhile, calls the case nothing but a “nuisance suit” and a “desperate attempt to try to gain control of a company he never even owned.” He also questions the timing of the criminal case as it comes just after perjury charges were filed against Bengzon.

“Those perjury charges clearly show that Dr. Bengzon had willfully made and filed misleading statements with the Securities and Exchange Commission which we are now seeking to correct,” says Gonzales.

The highly publicized row bled into Guam as GRMC’s CEO Margaret Bengzon, the daughter-in-law of Dr. Alfredo Bengzon, was replaced by Dr. Michael Cruz. After much speculation over the impact a parent company dispute would have over GRMC’s future, Gonzales, who was now GRMC’s new board chairman, reassured the public that the dispute within the parent company had no bearing on GRMC’s future. He also acknowledged the strain GRMC caused in the company’s finances but assured the public that “we’re at the tail end of that phase.”

Those assurances, however, seem to weaken against his new statements condemning the Bengzons for their management of GRMC.

“Given Bengzon’s previous track record of appointing family members and cronies to management positions, and allowing his daughter in law to poorly manage the construction and operation of the Guam subsidiary, I cannot see how the best interests of the majority shareholders will be served with his ats of desperation,” notes Gonzales.

Dr. Bengzon has fired back with a second statement against Gonzales, pointing out that the perjury charges against him have been dismissed by the Philippines courts.

You can read Dr. Bengzon’s full statement here.