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The curious case of Standford Resources

"This could be something for the books."

 

It’s great to hear the Philippine Amusement and Gaming Corporation is launching a serious crackdown on illegal online gaming firms operating in the country. And dead-serious Pagcor is as no less than its chair, Andrea Domingo bared that they have already shut down almost 200 fly-by-night online gaming companies in the last few months.

These illegal Pogos, or Philippine Offshore Gaming Operators, Domingo says, are not only depriving the government of billions of pesos in unpaid taxes, but are also giving the legal Pogos a bad name.

According to Domingo, these legal Pogos bring immense benefits to the Philippine economy—mainly to the real estate sector which is currently booming, thanks to the need for office space of Pogos and housing for their workers. This translates to P20 billion a year in lease and rental payments, and another P24-billion government income in the form of taxes.

Quite noticeably, most of these illegal Pogos are located in the City of Parañaque, maybe because of its proximity to the airport, enabling these illegal entities to deploy immediately for employment their workers, most of whom come from mainland China. But aside from hosting these illegal Pogos, Parañaque, as per results of the raids conducted by authorities, now reportedly also hosts prostitution dens catering to foreign clients.

And despite the huge number of illegal Pogos and prostitution dens raided and closed by Pagcor and Parañaque in coordination with law enforcement agencies, there are still a number of establishments in Parañaque, which might be leasing their properties to illegal Pogos.

One of these establishments allegedly, is the Diamond Bay Towers, which was recently raided for allegedly operating a Chinese-only prostitution den, the Manila Wellness Spa on the 3rd floor. 

The building which is located in 150 Roxas Blvd., Baclaran, Parañaque is owned by Standford Resources and Development Corporation and reportedly headed by one Bennie Cuason.

Residents in the Parañaque area have reasons to suspect Diamond Bay Towers might be hosting Pogos as they have spotted an unusual large number of Chinese entering the building, together with foreign construction workers.  

And most probably, these Pogos or any Chinese firm operating inside Diamond Bay Towers, could be illegal for the simple fact the said building and its owners, have been operating for years without any valid business permit.

Documents secured by this writer bare that Cuason incorporated Standford Resources and Development Corporation in 1994 and one of its big projects was the development and construction of three condominium buildings called Diamond Bay Towers. It secured a development permit from the HLURB as well as a Building Permit from the City of Parañaque all named under Cuason as the owner.

As any other corporation, Standford enticed the general public to put in investment worth millions of pesos either as investors, creditors, unit buyers or all for the said project.

However, after reportedly getting the money from the aforesaid investors, creditors and unit buyers, Standford suddenly filed a petition for Rehabilitation and Suspension of Payments with the Securities and Exchange Commission apparently to purposely evade the continuation of the construction of the Diamond Bay Towers and to enable its officers Cuason and 4 others to hide behind the legal cloak of corporate rehabilitation thereby escaping payment from its investors, creditors, unit buyers, as well has local government taxes. 

The petition, however, was dismissed on Oct.13, 2000 and Standford was declared technically insolvent meaning that no further rehabilitation was possible. The company was placed under receivership for the purpose of liquidating all of its remaining assets to pay off creditors.

Interestingly and suspiciously, despite the supposed financial distress of Standford having been declared insolvent by the SEC, it was still able to continue the construction and development of the Diamond Bay Towers but allegedly with a different set of investors without the approval of the SEC, prompting the SEC to reprimand Cuason. 

This incident is so alarming as the scheme victimizes the general public by using the cloak of corporate rehabilitation law, thereby circumventing the purpose of its enactment and giving the culprits a pale excuse to be free from their apparent liability to their creditors and investors, both civil and criminal. Lawmakers should take heed that the law they enacted is being used against the very public which it was designed to protect.

The project, while legally considered insolvent and for liquidation is still being brazenly being offered for sale and lease to the unsuspecting general public as of this writing. The company is said to now only accept Chinese buyers or lessors. No Filipino buyers allowed. This is believed to be a scheme employed by the perpetrators in order to circumvent local authorities.

And aside from operating without the necessary permits, having been ordered for liquidation, other agencies, particularly the HLURB, the SEC, the Department of Labor and Employment and even the local government of Parañaque, have sent notices of various violations to Standford.

And how was Standford able to escape all these? According to the same set of documents this writer secured, Diamond Bay Towers is now operating under a different company name—Hua Shang Philippines Development and Management Company, but still points to Cuason as owner when employees of the building were asked.

Cuason, however, seemed to overlook something as when he decided to change the name of the operator of Diamond Bay Towers, the original titles. The land title as well as the commercial unit titles are still under Standford’s name. It cannot feign ignorance or wash its hands clean of this incident. 

Indeed, the case of Standford’s and that of Cuason’s is something for the books. Imagine an insolvent company subject for liquidation being able to finish its project and being able to change ownership as if it was done in just a flick of the fingers and now being able to operate full blast, under the nose of the authorities.

Pagcor, the City of Parañaque and other government agencies should really look into this. How is it that a company like Standford is still operating Diamond Bay Towers and continuing business as usual while being declared insolvent and without proper permits? 

No tenant, including Pogos, would be able to secure the necessary papers to legally operate business inside the Diamond Bay Towers since the very building itself is operating illegally. And if Diamond Bay Towers is operating illegally, it follows that whatever business entities are operating within the building, are also illegal.

To confirm the veracity of the documents in my possession I tried to reach out to the parties in question, to no avail. It would be good if they could also air their side on the matter. I will devote this space to clarifications when they do.

Topics: Philippine Amusement and Gaming Corporation , Philippine Offshore Gaming Operators , Andrea Domingo , Standford Resources and Development Corporation
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