1. (group 1: local-case study)

2. * Acquired it’s commercial banking license in Feb. 1996 * At the end of 1996 and 1997: total assets amounted to P2.8 billion and P7.8 billion * 1997: 52 branches * Feb. 14, 1997 declared bank holiday due to liquidity problems * BSP discovered some P5.44 billion unrecorded loan to the bank’s directors, officers, shareholders, and other related interest (DOSRI) including loans of P50,000 each to 8 newly-founded companies. Disbursements were made to these 8 companies even before their registration was approved by SEC * Last examination of BSP of the bank’s records was in 1996, when it was still a thrift bank

3. * Wincorp collapsed in the year 2000 * Violated on a large scale of DOSRI policy financial institution * The biggest borrower was also the 2 nd largest stockholder of Wincorp (Sta. Lucia realty and development Inc.) * Unioli resources and holdings company inc. (major stockholder of Wincorp) were also a borrowers of Wincorp in over 50% of the pooled investment accounts * Skirted the “19 lender rule” : Wincorp collects investment from 2200 clients and combining them to less than 20 accounts * Wincorp loaned 1.5 billion to Malaysian Hottick Holdings corp. and 2.5 to Power Merge * Other borrowing firms related to directors/owners amounted to P3.7 billion * Most of the debtors were also shareholder of Unioil and holdings and co., Inc. which owns 100% of Wincorp

4. * Decision process * Violation of regulation; weaknesses of regulatory agencies -DOSRI policy/restriction to bank exposure to DOSRI * Financial reporting standards

5. * Should encourage diversified ownership * Strict enforceability of law * Stringent auditing in internal and external * Monitoring system by regulatory / supervisory bodies should be strengthened * Stakeholders must be ethical