Saturday, June 30, 2012

Lotto paper supplier, PCSO trade charges


Lotto paper supplier, PCSO trade charges
By Jerry E. Esplanada, Nathaniel R. Melican
Philippine Daily Inquirer
6:32 am | Saturday, June 30th, 2012

MANILA, Philippines—The TMA Group of Companies, Pty. Ltd. (TMA), an Australian paper manufacturer, has dared President Benigno Aquino III to make good on his “Daang Matuwid” crusade by curbing the alleged abuses of the state-run Philippine Charity Sweepstakes Office (PCSO).

TMA has accused the PCSO of, among others, “blatant and total disregard of court orders” which directed the agency to honor its existing joint venture agreement (JVA) with the Australian firm.

But the PCSO maintained it was in fact following President Aquino’s crusade by refusing to honor the JVA with TMA since the deal was disadvantageous to the PCSO.

In a statement, PCSO chairman Margarita Juico said the agency had nullified the JVA because it puts the PCSO at a disadvantage.

“The JVA is not within the PCSO’s corporate purpose and mandate. Furthermore, the JVA is grossly prejudicial to the interests of PCSO,” Juico said.

50-year deal

Under the 2009 contract, TMA was supposed to supply the PCSO with thermal paper for its lotto tickets for 50 years.

According to TMA director Tony Saad, “as a multinational company which will be investing over $400 million this year in expansion, of which P4.4 billion has been earmarked in the Philippines, it is very difficult to understand how the President can simply allow his appointees to the board of the PCSO to act in contempt of court.”
Former Solicitor General Romeo de la Cruz, TMA legal counsel,  reminded PCSO that “the Regional Trial Court in Makati City has issued writs of preliminary mandatory and prohibitory injunction ordering PCSO to immediately lift the suspension of the implementation of the JVA.”

But the PCSO board, chaired by Juico, has issued Resolution No. 119, questioning the Makati RTC’s injunction order against the agency.

PCSO general manager Jose Ferdinand Rojas II has informed Anthony Karam, TMA chief executive officer, that the PCSO board had revoked the JVA after finding the deal “void and inexistent because it is undertaken to circumvent Republic Act No. 9184, which covers the procurement of supplies, and evade Commission on Audit audit.”
Lawyer Ofelia Cajigal, TMA Philippines country head, said “PCSO’s defiance of the TRO and writs of injunctions constitute indirect contempt of court under Section 3 of Rule 21 of the Rules of Court.”

The PCSO has filed graft charges with the Office of the Ombudsman against former PCSO chair Manuel Morato, former PCSO general manager and vice chair Rosario Uriarte, and former directors Jose Taruc, Raymundo Roquero and Ma. Fatima Valdes, who approved the P42 billion contract with TMA to supply the PCSO with the thermal paper.

They were charged for signing PCSO Resolution No. 2171 allowing TMA to build a thermal coating plant in the country which will export thermal paper, and provide PCSO with thermal paper.

The respondents were also slapped with charges for violation of the Government Procurement Reform Act and the Code of Conduct and Ethical Standards for Public Officials and Employees.

Supply deal, not JVA Lawyer Ma. Aleta Tolentino, an incumbent PCSO director, had told the Inquirer “it was simply a supply contract in the guise of a JVA.”

“Let’s say it’s a good deal… but you don’t tie the office for half a century,” Tolentino explained.

The contract allowed TMA to invest P4.4 billion in the plant, and supply thermal paper worth P42 billion to PCSO for 50 years.

Morato insisted the contract was legal.

“Under the contract, the PCSO would not spend even one peso. Also, the deal was not for 50, but only for 25 years. It is renewable for another 25 years but it has to go through a review and evaluation every five years,” he added.

But Juico noted that the Senate Blue Ribbon Committee had also found the JVA to be “grossly prejudicial” against PCSO.

In its Dec. 19, 2011, report, the committee recommended the cancellation  of the JVA after finding that the former board of the PCSO had violated the Anti-Graft and Corrupt Practices Act.



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