new 2001 EDITION OF IN DEFENSE OF GAFFOOROF AMANAH ISLAMIC BANK

1. IN DEFENSE OF GAFFOOR
IN AMANAH ISLAMIC BANK-
NEW 2001 EDITION
By Abdel Aziz Dimapunong
Chancellor, Islamic Banking Research Institute
Founding Chairman
Amanah Islamic Bank (1992-1998)
2001 NEW EDITION
EDITED BY RAJIB KHAN
INCUMBENT CHANCELLOR
ISLAMIC BANKING RESEARCH INSTITUTE
.
THE EDITOR, RAJIB KHAN, IS THE INCUMBENT CHANCELLOR OF THE ISLAMIC
BANKING RESEARCH INSTITUTE. THE AUTHOR, ABDEL DIMAPUNONG HAS
JOINED THE ARAMEX CAPITAL CONSORTIUM AND HE IS NOW THE MANAGING
DIRECTOR OF ARAMEX PHILIPPINES;DIMAPUNONG IS ALSO INDEPENDENT
DIRECTOR OF THE FOLLOWING INVESTMENT BANKERS:
1, ERA INVESTMENTS, HONGKONG
2. ERA GLOBAL SECURITIES, SPAIN
3. BARINGS CAPITAL CORPORATION, LONDON]
[NOTE ABOUT THIS SAME CASE, A COPYOF A DECISION OF THE COURT OF
APPEALS IS ANNEXED HEREWITH
From the very start, this Blog has been identified as The World of
Islamic Bankers. Judging from responses and comments that I
have received from the readership coverage, most of the viewers
are former directors and officers of the Amanah Islamic Bank.
In defense of Gaffoor and Dianaton Abdel Aziz Dimapunong

2. Some are present stockholders of the bank. Some are investors.
Yet some are just curious about Islamic banking in general.
A good number of viewers to my Blog knew me personally as the
founding chairman and chief executive officer of the Islamic Bank
from 1992 to 1998. Among them are Grande Dianaton, Ashroff
Gaffoor of Sri Lanka, Manuel Peyton Maliwanag of California,
U.S.A., Tammy Chun Ying, a Chinese stockholder of the Islamic
Bank from Australia, David Satinover of New York, U.S.A. and
other foreign stockholders of the Amanah Islamic Bank. I have
written this article as per request of Gaffoor and Dianaton,
former president and incumbent chairman of the Amanah Islamic
Bank.
Some stockholders of the bank sent me email messages about
malicious postings in a certain website related to a perennial
complaint of a certain Engr. Farouk Carpizo. The complainant
already died several years ago but his postings on the Internet are
still there, forcing his victims to respond – not to him who is dead
but to his postings which are still live on the Internet. I received
this same kind of email from Ashroff Gaffoor who requested me
to present my comments on the issues. I am obliged to make a
response on behalf of the respondents by the fact that I was
founding chairman of the Amanah Islamic Bank.
This article is based on the results of the investigation of the
Department of Justice on a complaint that it received docketed as
I.S. No. 99-1806. As the I.S. number indicates, this pertains to a
complaint in 1999, or seven years ago. The complaint was filed by
certain former lawyers of the Bangko Sentral ng Pilipinas (BSP),
Atty. Rolando A.Q Agustin and Atty. Rosalina P Ojascastro as
allegedly representing the Monetary Board. The filing of the
complaint was based on the original complaint by Farouk
Carpizo.
The BSP lawyers just did their job upon receipt of an original
complaint that was maliciously filed with the Central Bank by
Carpizo. Upon my research, I found that the lawyers of the
Bangko Sentral filed the case wrongfully. They filed the case in
In defense of Gaffoor and Dianaton Abdel Aziz Dimapunong

3. the name of the Monetary Board but without the consent of the
latter. They had no authority to represent the Bangko Sentral ng
Pilipinas on legal matters. Under Section 18, par (c) of the new
Central Bank Act, R, A. 7653, it is the Governor of the Bangko
Sentral ng Pilipinas who is authorized to represent the Bangko
Sentral in any legal proceedings, action or specialized legal
studies.
On their affidavits, the BSP lawyers had to confess that they were
not authorized by the Monetary Board. They were only acting on
their own. That was a fatal mistake because they misrepresented
the Monetary Board and the Bangko Sentral. Not having been
authorized, the case cannot bind the Monetary Board and the
Bangko Sentral.
The Islamic Banking Research Institute of which I am the
chairman has complete files related to the investigations of the
Department of Justice on this case. The Institute is being updated
by the incumbent chairman of the Amanah Islamic Bank, Mr.
Grande M. Dianaton, original stockholder of the old Philippine
Amanah Bank and one of the founding stockholders of the Al
Amanah Islamic Investment Bank of the Philippines.
First, who was Farouk Carpizo? Who was this man who posted
malicious statements on the Internet? I shall not speak about him
except that he died some years ago. I knew this because he was my
neighbor. The fact the he died already is a good reason not to
perpetuate his complaint. But somebody is still hosting his
malicious postings on the Internet.
I shall limit myself to what official records have to show about
Engr. Farouk Carpizo.
The following is the legal story based on the files of the Amanah
Islamic Bank and the Department of Justice of the Philippines.
In defense of Gaffoor and Dianaton Abdel Aziz Dimapunong

4. Seven years after we had formally organized the Islamic Bank in
accordance with its charter, R.A. 6848, the Supervision and
Examination Department of the Bangko Sentral ng Pilipinas
(BSP) was misinformed by one Engr. Farouk Carpizo. Sometime
in 1999, he represented himself to the BSP as a government
representative. In truth, as the records show he was president of
the old abolished Philippine Amanah Bank (PAB) – not the new
Al Amanah Islamic Investment Bank of the Philippines. He
claimed that the Islamic Bank is a government bank of which he is
the president, representing the government. And he further
charged Grande Dianaton, Ashroff Gaffoor and some of the
directors of the private Islamic Bank as bogus!
Based on hearsay, the BSP lawyers filed a formal complaint
allegedly in the name of the Monetary Board against Grande
Dianaton, Ashroff Gaffoor and some directors and officers of the
original Islamic Bank. Bad publicity in the press and the Internet
was made, and investigation was conducted by the Department of
Justice. What a waste of time! All the charges were maliciously
manufactured. These false charges are the ones that were posted
on the Internet.
The complainant charges those innocent officers as bogus – but
actually it was he and his group who were the real bogus.
At this point, it bears relevance to introduce the complainant,
Engr. Farouk Carpizo based on records of no less than the Hon.
Supreme Court of the Philippines.
As I have said, I shall not personally comment on the person of
Farouk Carpizo who is already dead but whose postings are still
live on the Internet. I will only quote the Honorable SUPREME
COURT of the Philippines from a DECISION involving one Engr.
Farouk Carpizo.
BEGIN QUOTE FROM SUPREME COURT
In defense of Gaffoor and Dianaton Abdel Aziz Dimapunong

5. (In this case, the Supreme Court speaks through the Hon. Justice of the
Supreme Court, Justice Hilarion Davide, Jr. who penned the following
Supreme Court Decision about the same Engr. Farouk Carpizo as being
“bogus”, who represented a “fake Board”)
“It must be pointed out that two groups had earlier vied for
control of the IDP, namely, (1) the Carpizo group headed by
Engr. Farouk Carpizo [Underscoring supplied]…Nevertheless, on
20 April 1989, the Carpizo group caused the signing of an alleged
Board Resolution authorizing the sale of the two parcels of land
mentioned above to private respondent Iglesia ni Cristo (hereafter
INC).
“If the SEC can declare who is the legitimate IDP Board, then by
parity of reasoning, it can also declare who is not the legitimate
IDP Board. This is precisely what the SEC did in SEC Case No.
4012 when it adjudged the election of the Carpizo Group to the
IDP Board of Trustees to be null and void. By this ruling, the SEC
in effect made the unequivocal finding that the IDP-Carpizo
Group is a bogus Board of Trustees. [Underscoring supplied]
Consequently, the Carpizo Group is bereft of any authority
whatsoever to bind IDP in any kind of transaction including the
sale or disposition of IDP property.
xxx xxx xxx
“. . . Nothing thus becomes more settled than that the IDP-
Carpizo Group with whom private respondent INC contracted is
a fake Board. [Underscoring supplied]
xxx xxx xxx
“… For the sale to be valid, the majority vote of the legitimate
Board of Trustees, concurred in by the vote of at least 2/3 of the
bona fide members of the corporation should have been obtained.
These twin requirements were not met as the Carpizo Group
which voted to sell the Tandang Sora property was a fake Board
of Trustees [Underscoring supplied], and those whose names and
signatures were affixed by the Carpizo group together with the
sham Board Resolution authorizing the negotiation for the sale
In defense of Gaffoor and Dianaton Abdel Aziz Dimapunong

6. were, from all indications, not bona fide members of the IDP as
they were made to appear to be. . . .
All told, the disputed Deed of Absolute Sale executed by the fake
Carpizo Board [Underscoring supplied] and private respondent
INC was intrinsically void ab initio.
[G.R. No. 127683 August 7, 1998, LETICIA P. LIGON, petitioner,
vs. COURT OF APPEALS and IGLESIA NI CRISTO,
respondents.]
UNQUOTE
Going back to the case of Ashroff Gaffoor and Grande Dianaton
versus Farouk Carpizo and the BSP, the following surfaced:
1. Owing to its fiscal crisis that closely approaches the Nicaraguan
syndrome, the Philippine government has never subscribed to the
capital stock of the new Amanah Islamic Bank.
2. The two BSP lawyers who filed the case had to confess upon
investigation that they had no authority to file the case from the
Monetary Board. That was an act of misrepresentation.
3. The two BSP lawyers did not know also that there was already
an earlier Resolution by the Honorable Supreme Court of the
Philippines on the same case complained about.
4. They charged Dianaton, Gaffoor and Mangompia for violation
of Republic Act No. 337 - not knowing that this was a non-existing
law at the time of the filing of the case. That was the old Central
Bank Act which was enacted in 1948!
In summary the complaint was based on hearsay that was loaded
with errors and falsity.
This story is not a fiction. The statements are facts of a malicious
and baseless complaint (Department of Justice, I.S. No. 99-1806)
filed by two misinformed BSP lawyers against innocent officers of
the new Amanah Islamic Bank. They not only misrepresented the
In defense of Gaffoor and Dianaton Abdel Aziz Dimapunong

7. Monetary Board but they also misrepresented the Office of the
President of the Philippines. And worst, they are misleading the
general public.
The following are the facts that were considered by the
Department of Justice (DOJ) in its Resolution on the complaint of
the Central Bank
BEGIN QUOTING THE DOJ RESOLUTION.
The respondents, “as summarized, jointly alleges that the
complaint-affidavit of the BSP against the respondents for
violation of Section 6 of RA 337 in relation to Section 36 of RA
7653, has no basis in fact and in law, based on the following: a)
that we are all stockholders and organic directors and officers of
the Islamic Bank, a corporation created by RA 6848, and duly
organized by most of us with present business development
address at No. 3, Block 11, Marawi Avenue, Maharlika Village,
Taguig, Metro Manila; b) that respondents Mangompia, Badio,
Pangcoga, and Rasuman, were among those present as organizers
in the organizational shareholders meeting of the Islamic Bank on
April 28, 1992 at the Army and Navy Club, Manila, of which the
original and authentic Islamic Bank was officially organized in
the manner prescribed by law under R.A. 6848; c) that their
decision to subscribe to Series “B” shares and Series “C” shares
in the capital of the Islamic Bank was based on their knowledge of
this legal processes which was sanctioned by the confirmation
letter of the SEC which issued a confirmation letter, dated July
29, 1993, that the Islamic Bank is deemed registered and
authorized to operate as of the date of approval of RA 6848, and
this was further boosted by another confirmation letter, dated
September 8, 1993, that the Islamic Bank is exempted from the
Revised Securities Act; d) that the legality of their being
stockholders of the Islamic Bank is even supported by the Hon.
Court of Appeals in its Decision on Civil Case No. CA GR No.
28445 entitled Abdel Aziz Dimapunong v. Hon. Zosimo Z. Angeles
where on page 6, par. 2 the Hon. Court states that “ there is no
question that the other petitioners, Abbas, Dianaton, and
Malambut, are stockholders of the bank”. Abbas and Malambut
In defense of Gaffoor and Dianaton Abdel Aziz Dimapunong

8. were among their predecessor directors while Dianaton is still a
director; e) that the legality of their being stockholders of the
Islamic Bank is also supported by the Office of the Solicitor
General in its Motion and Manifestation dated September 22,
1992; f) that a careful reading of the complaint of the Monetary
Board clearly shows that it is a recycled complaint, the original
“Complaint For Injunction with Damages” having been filed by
then Finance Secretary Roberto De Ocampo and Farouk Carpizo.
This is the same complaint by the BSP officials in the instant case;
g) that the complaint alleges without basis that “the legitimate
government owned Islamic Bank, which is duly recognized by the
Bangko Sentral, is the Al Amanah Islamic Investment Bank of the
Philippines (AIIBP) which was created and existing pursuant to
the provisions of R.A. 6848, and the majority shares of which are
held by the National Government, Social Security System (SSS),
Government Service Insurance System (GSIS), Development
Bank of the Philippines (DBP), and the Asset Privatization Trust
(APT)” In response, we state that this is totally wrong because the
shareholdings of the National Government, SSS, GSIS, DBP, and
APT refers to their shareholdings in the abolished Philippine
Amanah Bank (PAB). These government shareholdings have long
been totally worthless because of the total bankruptcy and
insolvency of the Philippine Amanah Bank which is now being
resurrected by the BSP by usurping the name of our Islamic
Bank; h) that the complaint states that certain persons were
“nominated by the president of the Philippines and elected in the
alleged general shareholders meeting held on June 30, 1999. This
is not true, the President of the Philippines did not nominate
anyone but in his letter of June 22, 1999, he wrote to DBP
Chairman Ramoncito Z. Abad (not to the chairman of the Islamic
Bank) expressing ONLY A DESIRE – not a nomination; i) that
the complainant should be educated about the charter of the
Islamic Bank to discover that we do not have to be under the
supervision of the BSP because the Islamic Bank is not just a bank
as defined under the General Banking Act but also an
INVESTMENT HOUSE”. Should it operate as an investment
house, the Islamic Bank is under the supervision of the SEC; j) it
must also be noted that the charter provides them exemption from
the provisions of the General Banking Act and Central Bank Act.
The charter provides the following exemption: “SEC. 39. Non-
In defense of Gaffoor and Dianaton Abdel Aziz Dimapunong

9. Applicability of Selected Acts. – In order to achieve the
international and domestic objectives of Islamic banking business,
the provisions of the following acts and laws shall not apply to the
Islamic Bank to the extent as herein rendered inoperative: “(1)
The provisions of the Central Bank Act and the General Banking
Act with particular reference to the determination of bank
interest rates, loans and discounts, and any interest-bearing
instruments or charge: provided that nothing contained herein
shall be construed to impair the powers of the Central Bank to
supervise and regulate the activities of the Islamic Bank.”; k) that
the undersigned respondents also question the capacities of
Rolando A.Q Agustin and Rosalina P Ojascastro as representing
the Monetary Board in the instant legal action. Under Section 18,
par (c) of the new Central Bank Act, R, A. 7653, it is the Governor
of the BSP who is authorized to represent the BSP in any legal
proceedings, action or specialized legal studies; r) Finally, it must
be noted that in supervising the Islamic Bank, the Monetary
Board shall supervise it in accordance with the Sharia’ Law (Sec.
43, R.A. 6848)
[Pages 7, 8, 9, and 10, DOJ Resolution, on I.S. No. 99-1806, dated
February 6, 2001, Manila, Philippines]
UNQUOTE THE DOJ RESOLUTION
The organizational meeting at the Army and Navy Club of Manila
With Grande Dianaton, April 28, 1992
In defense of Gaffoor and Dianaton Abdel Aziz Dimapunong

10. The 1999 International stockholders meeting at Richmond Hotel
With Ashroff Gaffoor (center)
What happens next?
The malicious complaint did not progress. The lawyers were not authorized
by the Monetary Board of the Bangko Sentral. They confessed to have acted
on their own – not the Central Bank.
How do I see the case? Well, it was a DAC, Dead on Arrival at Court.:
1.THE JUDGE MUST HAVE NOTEDTHAT THERE WAS NO
PROBABLE CAUSE
2. THERE WAS ALSO NO BASIS IN LAW AS THE GENERAL
BANKING LAW WAS ABOLISHED AND REPEALED BYTHE NEW
GENERAL BANKING LAW OF 2000 MORE POPULARLY KNOWN AS
THE NEW GBL2000
8888888888
THE EDITOR, RAJIB KHAN, IS THE INCUMBENT CHANCELLOR OF THE ISLAMIC
BANKING RESEARCH INSTITUTE. THE AUTHOR, ABDEL DIMAPUNONG HAS
JOINED THE ARAMEX CAPITAL CONSORTIUM AND HE IS NOW THE MANAGING
DIRECTOR OF ARAMEX PHILIPPINES;DIMAPUNONG IS ALSO INDEPENDENT
DIRECTOR OF THE FOLLOWING INVESTMENT BANKERS:
1, ERA INVESTMENTS, HONGKONG
2. ERA GLOBAL SECURITIES, SPAIN
3. BARINGS CAPITAL CORPORATION, LONDON
In defense of Gaffoor and Dianaton Abdel Aziz Dimapunong