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Senate issues arrest order vs. Yang, Pharmally execs

A warrant of arrest has been issued against former presidential economic adviser Michael Yang after he was cited for contempt for snubbing twice the subpoenas issued by the Senate Blue Ribbon committee.

The committee, chaired by Senator Richard Gordon, also moved for the issuance of arrest warrants against the five officials of Pharmally Pharmaceutical Corp., the small company that bagged over P8 billion in contracts from the Procurement Service-Department of Budget and Management (PS-DBM).

The Pharmally officials are Mohit Dargani, Twinkle Dargani, Justine Garado, Linconn Ong and Krizle Grace Mago.

Senate President Vicente Sotto III confirmed signing the arrest warrants late Tuesday.

Huang Tzu Yen, chairman and president of Pharmally, and the firm’s accountant, Iluminada Sebial, were the only ones who appeared virtually in the fourth Blue Ribbon hearing on the Department of Health's procurement of overpriced medical supplies such as face shields and face masks and personal protective equipment (PPE), all coursed through the PS-DBM.

Asked by Senate Minority Leader Franklin Drilon about his current location, Huang said he is in Singapore.

“So, we have a very peculiar situation here, an oath has been administered on a person who is outside of the jurisdiction of the country,” said Drilon.

“The only remedy that I can think of is, probably, Mr. Huang stating on the record that he is willing to reaffirm whatever the testimony will be in these proceedings and go to the [Philippine] embassy and submit the statement in affirmation of his statements here, in order that he can be bound under oath by the statements he makes,” Drilon said.

In response, Huang said he was willing to reaffirm his oath to an official of the Philippine Embassy in Singapore. 

In response to a question from Gordon, Huang said the Taiwanese government has not issued a formal arrest warrant against him yet over alleged stock manipulation, and said he only knew about it through news reports.

But Senator Risa Hontiveros cast doubt on his statement, saying his name was posted on the website of Taiwan’s Ministry of Justice since 2020.

“Just for the record, it really invites incredulity the statement just made by Mr. Huang Tzu Yen that he is not aware of the warrant of arrest in relation to stock manipulation because it has been posted on the website of the Ministry of Justice Investigation Bureau of Taiwan since December 2020,” Hontiveros said.

In Tuesday’s hearing, Gordon said he agreed to issue an arrest warrant against Yang after his alleged driver refused to receive the subpoena the Senate served at his leased residence in Narra Avenue, Forbes Park, Makati City.

"The driver refused to receive the subpoena and said there is no Michael Yang residing in said address," said Rodolfo Quimbo, director general of the Blue Ribbon Oversight Office Management.

"An insurance company courier arrived for a certain Nancy Yang. The driver said there was no Nancy Yang in the house," he said.

Despite the driver's denial, several senators noted that a copy of the lease agreement for the Forbes property showed that Michael Yang has been renting the house for P6 million annually from April 2017 to April 2022.

Drilon noted that the lease agreement expressly provides that the residence will be used by Mr. Michael Yang Hong Ming.

Senator Francis Pangilinan noted that when one or two subpoenas have been ignored or disregarded, the next step is to issue a warrant of arrest.

Yang was tagged in the controversial procurement after a 2017 video showed him introducing Pharmally officials to President Rodrigo Duterte in Davao City.

The President defended Yang against allegations that he has been brokering deals between the government and businessmen who were facing fraud cases abroad.

"Michael Yang has been in business here in the Philippines for 20 years. He started in Davao. Aren’t we inviting investors?” the President said in his defense.

Hontiveros on Tuesday said the President had a direct engagement with fugitive Huang Wen Lei, chairman of Pharmally International, which is the mother company of local firm Pharmally Pharmaceutical.

The company has bagged over P8.6 billion in contracts so far to provide the country with health and medical supplies.

The senator shared a 2017 article from Taiwan-based newspaper China Times about a meeting between Huang Wen Lei and Duterte in Davao.

She said the English translation of the China Times article states: "Huang Wen Lei and entrepreneurial shareholder Wang Mingliang and other core executives visited the Philippines. Duterte made special arrangements. They all met at the Davao Hall and invited the director of [the Food and] Drug Administration and the deputy minister of Health to attend the meeting."

The article then said that the "closer cooperation between the two parties" would "create a win-win situation."

In 2017, the director of the Food and Drug Administration was Nela Puno, whom Duterte fired in 2019 on corruption allegations.

Puno — along with the President, Huang Wen Lei, and Michael Yang — is also seen in the photograph that accompanied the China Times article.

Yang, chairman of the Philippine-based Full Win company, also has close links to another fugitive, Zheng Binqiang, the chairman of China-based Full Win Group.

Hontiveros said that while Duterte should still be given the benefit of the doubt, the meeting with the Pharmally boss certainly does not make him look good. She wondered if the President didn’t care that the persons he met with were associated with the word “wanted.”

Gordon described the persons involved in the overpriced procurement of medical supplies as “evasive” and said there seemed to be “a planned plunder of P42 billion.”

"We have a situation where there is a purchase of face masks, face shields and PPEs that did not seem to follow the rules and proper protocols to safeguard the interest of the people and this country," Gordon said.

He noted there should be accountability and transparency on the part of PS-DBM.

The PS-DBM, then under former Usec. Christopher Lao, was tapped to buy billions worth of medical supplies on behalf of the DOH.

Senator Panfilo Lacson questioned the accommodation provided to foreign companies, but not to Filipino entrepreneurs.

While Filipino company EMS Components Assembly, through its chief executive Perry Ferrer, was called by the Department of Trade and Industry to produce face masks and face shields, the orders by the government were stopped as they shifted to getting supplies from China.

Lacson also cited the use of C-130s of the Philippine Air Force to ferry PPEs from China to the Philippines.

Vaccine czar Carlito Galvez confirmed the use of the C-130s.

Pangilinan said he was surprised with Galvez's admission that the C-130 planes and Navy ships were dispatched to get the personal PPEs from a private manufacturer in China and distribute these to the different hospitals across the country.

"So, in other words, the Procurement Service of the DBM entered into this contract and agreed that the private company can use Philippine Air Force planes, and this was on our expense. We will buy from you, and we will pick up,” Pangilinan said.

Galvez replied in the affirmative, pointing out that it was the agreement and the same was done with the procurement of vaccines.

Pangilinan said he wants to look into the alleged poor quality of Chinese-made PPEs.

Galvez also said PPEs, at that time, could only be sourced from China, and that the transport cost was charged to the government.

This was contradicted by Hontiveros, who said qualified local manufacturers can provide our needs for these medical supplies.

However, they failed to bag a contract despite passing DOH standards and being recognized by government agencies as early as September 2020.

She said local manufacturers under the Confederation of Wearable Exporters of the Philippines (CONWEP), which were capable of producing 10,000 PPEs per day, did not get any supply contracts from the government.

"Local manufacturers were puzzled why despite securing the necessary permit from the Food and Drug Administration (FDA), they did not get any contract from the government, unlike Pharmally which, based on our previous hearing, does not have a permit to import from FDA but was not contested by former Budget Undersecretary Lao,” Hontiveros said.

Senate President Pro Tempore Ralph Recto said he will introduce a proposal in the 2022 General Appropriation Act limiting the role of the PS-DBM and the Philippine International Trading Corp.

He cited the need to clarify the accountabilities of the agencies in light of the controversies surrounding the purchase of PPEs by PS-DBM in 2020.

Topics: Michael Yang , warrant of arrest , Richard Gordon , Pharmally Pharmaceutical Corp.
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