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Baguio’s Camp John Hay chair indicted for P1.15-B estafa

Rappler.com

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Baguio’s Camp John Hay chair indicted for P1.15-B estafa
The Sobrepeña-led group has accumulated lease payment arrears in the amount of P3.4B, of which P850 million belongs to the people of Baguio and the Cordilleras

MANILA, Philippines – The Department of Justice (DOJ) on Wednesday, June 10 charged businessman Robert John Sobrepeña with estafa for owing the state-owned Bases Conversion and Development Authority (BCDA) damages worth P1.15 billion.

In August 2012, BCDA filed with the DOJ an estafa complaint versus Camp John Hay Development Corporation (CJHDevCo) board of directors and officials for misrepresenting the state of the company’s finances to BCDA, thus misleading the government into believing that CJHDevCo was capable of paying its annual rent.

Casanova said the difficult and challenging efforts being undertaken by the BCDA to collect from the Sobrepeña-led CJHDevCo was for the people of the Cordilleras and Baguio City.

The Sobrepeña-led CJHDevCo has accumulated lease payment arrears to the BCDA in the amount of a staggering P3.4 billion, of which, 25% or P850 million belongs to the people of Baguio and the surrounding municipalities.

Under the terms of the 1996 lease agreement, CJHDevCo was supposed to pay an annual rent of P425 million or 5% of gross revenues for the first 5 years of the lease, whichever was higher. This meant that for 1998, 1999, and 2000, the government was supposed to receive P1.275 billion in rental payments.

In 1998, Sobrepeña claimed CJHDevCo’s operations were adversely affected, resulting in losses of P1.445 billion, which was increasing daily. As such, the agreement was first restructured in 2000.

CJHDevCo, however, concealed the fact that it declared cash dividends totalling P928 million in the years 1998, 1999, and 2000. (Editor’s note: It was earlier written that CJHDevCo did not declare cash dividends totalling P928 million in the years 1998, 1999, and 2000. We regret the error.)  

 

“We laud the DOJ in this breakthrough decision to make fraudulent businesses accountable to the people and to protect the interest of the public from fraudulent schemes,” BCDA President and CEO Arnel Paciano Casanova said.

In a resolution penned by Catherina Isabel Caeg, the prosecutors found probable cause to charge Sobrepeña with estafa under Article 315 (2) (a) of the Revised Penal Code.

The DOJ resolution pointed out, “CJHDevCo deliberately chose not to perform its rental obligations to BCDA despite knowledge of such and existence of retained earnings and other revenue.”

The DOJ resolution stated that based on its 1998 financial statements, “CJHDevCo could have very well met its rental obligation of P425,001,378 million had it chosen to do so as seen by its acts of disposing P674,065,290 by way of dividends ….”

The resolution also stated that CJHDevCo’s financial statement in 1999 showed it was able to dispose of P250 million, representing the amount declared as dividends to its stockholders, while in 2000, CJHDevCo also readily disposed of P350 million again in declaring dividends to its stockholders.

As such, the total amount utilized by CJHDevCo in declaring dividends, extending cash advances, and assignment of shares during the years 1998,1999, and 2000 totaled to P1,274,065,290, the resolution stated.

Casanova said the DOJ’s ruling puts into question all of CJHDevCo’s former Memoranda of Agreement (MOA) with BCDA as well as all other agreements that CJHDevCo has entered into with its locators, buyers, and business partners.

“While people languish in poverty we cannot allow unscrupulous businessmen to take advantage. As public servants, BCDA is committed to bring them to justice,” Casanova said. – Rappler.com

 

Judge’s gavel with handcuffs on legal book image from Shutterstock

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