WB unit allows ex-gov’s son to pay debt in 2 installments

THE International Finance Corp. (IFC) and the oldest son of former Cebu governor Emilio “Lito” Osmeña have amicably settled the civil case the lending firm filed against the Osmeña scion, to collect US$326,670.21.

IFC, an arm of the World Bank (WB), filed the case at the Regional Trial Court (RTC) in Cebu City last year after Mariano V. Osmeña and wife Svetlana did not heed an order from the High Court of Singapore to pay the amount they owed the WB investment unit.

In the compromise agreement between the IFC and the Osmeña couple, the Osmeñas acknowledged having incurred a debt of US$326,670.21 (or more than P14 million at an exchange rate of P43.1665 to a dollar), inclusive of principal, capitalized interest and jeopardy expenses as of Jan. 4, 2011.

The IFC agreed to reduce the outstanding obligation of the couple from US$326,670.21 to US$216,047.60. The couple agreed to “promptly and faithfully” pay the amount in two installments.

Mediation

The first payment of US$108,023.80 will be made on or before July 15, 2011, while the balance will be paid on or before Dec. 15, 2011.

The compromise agreement, signed last April 4, came after six mediation sessions initiated by the Philippine Mediation Center.

Akbar Husain, IFC representative, accompanied by counsel Joan Largo, signed the compromise deal with Mariano and Svetlana.

Court mediator Alvin Redido certified that both parties settled the case following the signing of a compromise agreement.

The IFC filed a civil suit for enforcement of foreign judgment and damages against the couple at the RTC last Aug. 19, 2010.

Recipient

According to the IFC website, the WB investment arm identified Avalon Professional Web (APW) Trade Pte. Ltd., where Mariano is a major shareholder (24.87 percent), as a recipient of its equity investment.

The IFC investment in APW was approved in April 2001.

APW, a trading company with offices in Singapore and Cebu, was involved in sourcing purchase orders for home furnishings from US buyers. The purchase orders were to be subcontracted to small and medium enterprises in the furniture manufacturing industry in Cebu.

According to the IFC Summary Project Information on APW, Mariano served as chief executive officer (CEO) and member of its board.

Mariano also served as CEO of MRC Allied Industry, a property development firm that has landholdings in San Isidro, Leyte and City of Naga, Cebu. But Bloomberg Businessweek revealed that he resigned last March 3 from MRC, citing his commitment to a project outside the Philippines.

Order

According to the complaint sheet, the High Court of Singapore ordered Osmeña on March 12, 2009, to pay the IFC US$209,036.38, which was already due on July 10, 2006.

The High Court of Singapore also directed Osmeña to pay IFC US $50,763 in interest from July 10, 2006 to March 9, 2009 and US$5,382.01 as indemnity cost.

When the coupled failed to pay up, Bernardito Florido, one of IFC’s counsels, sent them a demand letter for debt totaling US$326,104.86.

Under the compromise agreement with the IFC, the couple is required to deposit the payment during the agreed dates. If they fail to do so, they would be required to pay in full the sum of US$379,064.45.

“Plaintiff (IFC) shall then be authorized to immediately and without delay cause the issuance of writ of execution from this Honorable Court against the defendants,” the agreement said.