Court stops Osmeña from closing Banco de Oro and issuing statements on the matter
The Regional Trial Court issued a 72-hour Temporary Restraining Order (TRO) preventing Cebu City Mayor Tomas Osmeña from closing the Magallanes Branch of Banco de Oro (BDO) Unibank.
In a statement yesterday, BDO said the court issued the 72-hour TRO on Monday after it filed a petition seeking relief from the court for the Cebu City mayor to act on the bank’s pending applications for business permit.
BDO also said that together with the petition, the bank consigned to the court the payment for the local business taxes and permit fees.
BDO Unibank said it hopes the issue of Osmeña’s threat to close the bank’s branches in Cebu City will be “put in proper perspective” with its petition before the court.
According to BDO, the TRO issued by the court enjoined Osmeña from “performing any act that leads to, and/or causes the closure of BDO’s branches in Cebu City, including any act prescribing, imposing and/or requiring information, document, or act not prescribed by existing law and regulations, as well as making announcements or statements similar to those made in the newspapers.”
In effect, the court issued a gag order against the mayor to refrain from making statements similar to what he has been saying in media, that he would close the bank because of alleged tax fraud.
Asked for his comment, Osmeña, in a text message, said BDO’s move was “expected.”
“BDO will exercise all its options to stop the closure. For me this will give businessmen time to arrange. After all the obstacles are cleared, I will still give a final three-day notice,” Osmeña’s text message read.
According to City Legal Officer Joseph Bernaldez, there will be a hearing today on the petition of BDO at the RTC Branch 18 to determine if the TRO should be extended.
Councilor Raymond Alvin Garcia said the mayor’s continued pursuit to close the BDO branches in Cebu City is cultivating an “atmosphere of fear” among the business sector.
In a privilege speech during yesterday’s Council session, Garcia called on the mayor to follow legal courses of action instead of “taking the law into his own hands” by threatening to close BDO’s 26 branches in the city.
“I am, therefore, asking our mayor to just stop the fear-mongering and enforce the rights of the city through the proper channels. Go to the courts, something which the mayor has done. But is it necessary that we make irresponsible threats and statements against these legitimate businesses operating in our city?” he said in his speech.
After his speech, Garcia proposed four different resolutions to the council which included noting the privilege speech and giving a copy of the speech to the mayor’s office, the Department of Interior and Local Government (DILG) and the Office of the Presidential Assistant for the Visayas.
The council also agreed to approve Garcia’s proposed resolution urging the mayor to “observe due process of law” on the renewal of the business permits of all banking and financial institutions in the city.
But his other resolution that sought “to denounce in strongest terms the threatening statements of the mayor directed towards BDO” was disapproved after objections from majority of the other councilors.
Councilors Margarita Osmeña and Sisinio Andales were the first to express their reservations on the resolution.
“That’s the prerogative of the mayor. If he believes that the city is being cheated in terms of taxes, then the government should stand for the city government of Cebu. I oppose the resolution,” Andales said.
With their opposition, the council was constrained to vote on this resolution. Eight voted against it, six voted in favor while one councilor abstained.
Aside from Osmeña and Andales, Councilors Mary Ann De Los Santos, Alvin Arcilla, Dave Tumulak, Eugenio Gabuya Jr., Hanz Abella and Joy Young also voted against the passage of the resolution.
Councilors Garcia, Jose Daluz III, James Anthony Cuenco, Joy Pesquera, Jerry Guardo and Pastor Alcover Jr., voted in favor.
Councilor Philip Zafra abstained from voting while Councilors Edu Rama and Joel Garganera were not in the session hall during the voting.
In his speech, Garcia said the mayor was obviously going after businesses owned by Henry Sy “with such zeal and fervor that can only be mustered by one with a personal vendetta.”
Aside from BDO, the mayor earlier accused the management of SM Seaside City Cebu of tax fraud and has also filed a case against them.
“Do we tell them to forget about doing business in the city? Or let’s just wait for the mayor to be replaced? We cannot just do something like that because if we do, you can just imagine the lost opportunity we will have from earning taxes for our city, providing employment to our people and spurring economic activity,” he said.
The mayor’s going after BDO, Garcia said, will also cause undue trouble for its Cebuano clients as well as BDO’s employees and their families.
Garcia also reiterated that taxes due to the city should never go unpaid. Whatever tax delinquency BDO has should be paid in full and enforced through proper channels, he added.
“The mayor projects himself as a lone guardian of the city going up against the giant corporations. But the David and Goliath fight ceases to be so when innocent bystanders are dragged into the mess,” Garcia said.
BDO, on the other hand, said the mayor’s insinuations that BDO Magallanes Branch failed to reflect its accurate income in its business permit application was uncalled for.
“In arriving at the proper business taxes due, gross receipts as defined under local tax laws include specific sources of income of a branch. Each branch has its own income brought about by the volume and amount of its transactions and that income is the basis for computation of local business tax due,” BDO said in a statement.
It said that BDO Magallanes branch has “consistently complied with law and regulations in the filing of its application for business permit for many years.”
BDO noted that it has not received any formal assessment for the branch from the Cebu City government insofar as its local business tax is concerned.
“Thus, as a taxpayer, BDO should not be faulted or blamed for whatever oversight or inadvertence the city government may have failed in tax collection for Cebu City,” the statement read.