The Bangko Sentral ng Pilipinas (BSP) has instructed Export Industry Bank (Exportbank) to reverse a P2.62 billion sale of a building it owned called Exportbank Plaza to ArthaLand Corp. (ALCO), formerly EIB Realty Developers Inc.

Based on company information, the bank sold the building, which was a non-core asset, to ALCO in 2007 for P2.62 billion. The bank had a “recognized” gain of P836.388 million from the sale. This amount was to be used as capital for its operations.

BSP sources said central bank examinees had considered this transaction “not a true sale” and its books should be amended. Sources said the supposed transaction, in which the buyer and seller are “related” only resulted to an amount not exceeding P200 million.

The same sources said the central bank was looking into governance issues and had also taken notice of the companies overlapping directors and officers.

The BSP had been extending and re-extending Exportbank’s authority to raise P3.3 billion as tier1. The last deadline was supposed to be September 30 but the Monetary Board has agreed last October 8 to extend it to the end of the month.

Several banks including Banco de Oro, RCBC, and Security Bank have reported interests in buying Exportbank in the past.

Exportbank, acquired Urban Bank in 2001 after the bank was closed because of liquidity problems. Urban Bank’s biggest depositors San Miguel Corp. and Petron Corp. opted to convert part of their deposits into equity.

The bank recently sold its subsidiary EIB Savings Bank to two of Petron’s companies New Ventures Realty Corp. and Las Lucas Development Corp.

Exportbank reported a P373 million loss as of the third quarter of 2008, which was more than the P325 million loss incurred the same period in 2007.

Exportbank is owned by Hong Kong-based Lippo Group through Lippo China Resources Ltd., Raiffeisen Zentralbank Österreich AG (RZB Group), American Orient Capital Partners and local firm Yao Group of Ambassador Alfredo Macam Yao.