G.R. No. 237558 , April 26, 2023
MARGARITO B. TEVES, PETITIONER, VS. OFFICE OF THE OMBUDSMAN AND FIELD INVESTIGATION OFFICE, REPRESENTED BY DAYID A. LUCERO, RESPONDENTS. [G.R. No. 238133] CYRIL C. DEL CALLAR, ALBERT C. BALINGIT, GEORGE J. REGALADO, AND ROBERTO S. VERGARA, PETITIONERS, VS. OFFICE OF THE OMBUDSMAN AND FIELD INVESTIGATION OFFICE, REPRESENTED BY DAYID A. LUCERO, RESPONDENTS. [G.R. No. 238138] GILDA E. PICO AND CAREL D. HALOG, PETITIONERS, VS. OFFICE OF THE OMBUDSMAN AND FIELD INVESTIGATION OFFICE, REPRESENTED BY DAYID A. LUCERO, RESPONDENTS.

FACTS

On March 2, 2007, the Privatization Management Office invited Land Bank of the Philippines (Land Bank) to join a block sale of government-held Meralco shares. The Land Bank board agreed on March 16, 2007, but the sale did not proceed. On November 7, 2008, Land Bank Vice President Carel D. Halog and First Vice President Roberto S. Vergara proposed selling Land Bank’s 4% Meralco interest via a block sale at PHP 90.00 per share, yielding a total consideration of PHP 4.193 billion. The board approved the proposal on November 10, 2008, authorizing Land Bank President Gilda E. Pico to negotiate and execute the contract. Pico entered into a Share Purchase Agreement with Global 5000 Investment, Inc. on December 2, 2008. The transfer did not proceed because Land Bank’s Meralco shares were levied upon on November 28, 2008, to satisfy a judgment in favor of Federico Suntay. Ownership was later restored to Land Bank by the Supreme Court on December 14, 2011. On July 3, 2014, Global 5000 filed a complaint for specific performance. On November 6, 2014, the Field Investigation Office of the Office of the Ombudsman filed a complaint against several Land Bank officers, including then Secretary of Finance and Land Bank ex-officio chairperson Margarito B. Teves, Pico, Vergara, Halog, and board members Cyril C. Del Callar, Albert C. Balingit, and George J. Regalado, for alleged violation of Section 3(e) and (g) of Republic Act No. 3019 . The Ombudsman, in an October 21, 2015 Resolution, found probable cause for violation of Section 3(g) but dismissed the charge for Section 3(e). It ruled that entering into the Share Purchase Agreement was manifestly and grossly disadvantageous to the government, citing Global 5000’s limited track record and capitalization, and provisions on dividend rights, voting rights, and grace periods for installments. The Ombudsman denied the petitioners’ motions for reconsideration in a February 24, 2017 Omnibus Order.

ISSUE

Whether the Office of the Ombudsman committed grave abuse of discretion in finding probable cause to indict the petitioners for violation of Section 3(g) of Republic Act No. 3019 .

RULING

Yes. The Supreme Court granted the petitions, reversed and set aside the Ombudsman’s October 21, 2015 Resolution and February 24, 2017 Omnibus Order, and directed the dismissal of the criminal case. The Court held that the Ombudsman committed grave abuse of discretion in finding probable cause for violation of Section 3(g) of R.A. No. 3019 . The elements of the offense are: (1) the accused is a public officer; (2) the contract or transaction is entered into by the government; (3) the contract or transaction is manifestly and grossly disadvantageous to the government; and (4) the public officer acts with evident bad faith. The Court found the third and fourth elements lacking. The contract was not manifestly and grossly disadvantageous. The sale price of PHP 90.00 per share was within the range of fair market value recommendations from reputable financial institutions. The terms, including installment payments with interest, the application of dividends to the outstanding balance, and the transfer of voting rights upon down payment, were standard business practices and part of a negotiated sale to a willing buyer, not a public bidding. The Ombudsman’s finding of disadvantage was based on a misappreciation of business judgment. Furthermore, there was no evidence of evident bad faith. The petitioners acted within their authority, relied on the recommendations of subordinates and financial advisors, and there was no showing they were motivated by malicious intent or gross negligence amounting to bad faith. The defense of good faith under Arias v. Sandiganbayan applies, as there was no clear showing that the petitioners were aware of any irregularity. Mere disadvantage to the government is insufficient to establish probable cause under Section 3(g).