The Volunteers Against Crime and Corruption on Thursday asked the Department of Justice to prosecute for plunder and other criminal charges Trade and Industry Secretary Ramon Lopez and officials of South-Korean based automotive manufacturer Hyundai Motor Co. and its Philippine partners.
The VACC alleged Lopez, Hyundai and others duped the government of more than P1 billion through the grant of tax exemptions and preferential treatment.
In its 13-page complaint, the VACC through lawyer Ferdinand Topacio also accused Lopez, as the chairman of the Board of Investments at the time, of committing the crime of economic sabotage through technical smuggling and estafa.
Besides Lopez, also named respondents were Mong-Koo Chung, Hyundai Motor Co.’s chairman and Co-Chief Executive Officer; president and Co-CEO Won-Hee Lee, and Yong Suk Lee, president of HMC’s Asia and Pacific Regional Headquarters.
Officials of the South Korean auto company’s local partner, Hyundai Asia Resources Inc., charged were Richard Lee, chairman emeritus; Edward Go, chairman; Conrad Marty, vice chairman; Maria Fe Perez-Agudo, president and CEO; Eleazar Reyes and Ladislao Avila Jr., board members; and Cristina Salvador, customs broker.
The complaint arose from the inspection conducted by the BOI on HARI’s manufacturing plant in Sta. Rosa, Laguna, which discovered its non-compliance with the Motor Vehicle Development Program under Executive Order No. 156.
The EO aims to establish and/or expand production facilities of global vehicle manufacturers to allow the export of completely-built-up motor vehicles and increase the exports of motor vehicles parts and components.
In line with MVDP, global motor vehicle manufacturers of four-wheel motor vehicles that qualify under the program were accorded, among others, a preferential tariff rate of one percent in the importation of completely knocked-down units, its parts and components.
During the inspection of HARI’s manufacturing plant, the VACC said the BOI discovered there were no assembly jigs and welding machines observed in the assembly floor; pallets of newly-delivered and fully painted body shells of several car models with steering wheels, seats, front and back lights, and side mirrors already installed; no painting and welding processes for its assembly operations; and only the installation of engine, tires and batteries and quality testing/inspection are being undertaken within the facility.
These findings indicate absence of basic assembly processes, the BOI noted.
VACC said Lopez should be held liable for plunder for taking advantage of his position as chairman of the BOI to unjustly favor HARI, with the latter being enriched at the expense of the government in the amount of P1.1 billion, representing the tax incentives given to Hyundai.
“It is worth noting that HARI has always enjoyed preferential and favorable treatment from respondent Lopez, the cancellation of HARI’s registration with the MVDP notwithstanding,” the complaint stated.
VACC noted the inordinate resolution of HARI’s motion for reconsideration to the additional time given to the company to implement assembly processes of welding and painting.
“Yet, despite… the incontrovertible evidence of HARI’s guilt, the BOI, through respondent Lopez, still opted to give HARI the luxury of time in complying with the terms and conditions of the MVDP,” the complaint said.
“The unmistakably shows that respondents colluded with one another to avail and enjoy certain fiscal benefits, in the form of preferential tax rates and customs duties, to detriment and prejudice of the Republic of the Philippines, thereby warranting that they be prosecuted for plunder,” it added.
The VACC stressed the respondents should also be held liable for economic sabotage through technical smuggling, for colluding with one another for HARI to take advantage of its registration as participant under the MVDP and paid only a one percent tariff rate for CBUs “when it should have been 30 percent.”
The respondents are also liable for estafa for HARI’s fraudulent representation, to make it appear that they have complied with the requirements under MVDP, the group added.
“The facts of the case will also show a conspiracy between the respondents,” the complaint concluded.