MANILA, Philippines—The Department of Justice (DOJ) on Monday recommended the filing of charges against 26 people and corporations, including Japanese casino magnate Kazuo Okada; Rodolfo Soriano Jr., a former consultant of Philippine Amusement and Gaming Corp. (Pagcor); and lawyers of a law firm for violating the country’s antidummy laws.
Okada is an investor in Pagcor’s Entertainment City in Parañaque City, while Soriano is a close associate of former Pagcor chair and chief executive officer Efraim Genuino.
The two men were investigated by the justice department upon the request of Pagcor chief Cristino Naguiat following reports in November last year that the Federal Bureau of Investigation was looking into the $40 million that Okada’s Universal Entertainment Corp. allegedly gave Soriano when the firm was lobbying to win concessions for a casino in Entertainment City.
Universal is one of four companies putting up casinos in Pagcor’s 130-hectare Entertainment City by Manila Bay. Solaire Resort & Casino, owned by Enrique Razon Jr.-led Bloomberry Resorts Corp., was the first to open in March.
Among those to be charged with violating the antidummy law were several lawyers of SyCip, Salazar Hernandez and Gatmaitan Law Firm (SSHG), who were found by investigators to have been hired by Universal to create three corporations that acted as dummies for the Okada-owned company.
The corporations were Eagle 1 Landholdings Inc. (Eagle I), Eagle II Holdco Inc. (Eagle II) and Tiger Resort Leisure and Entertainment Inc. (Tiger Resort).
At a news conference, Justice Secretary Leila de Lima released the report of the DOJ-National Bureau of Investigation panel after a six-month probe.
But De Lima said the DOJ was not ready to file direct bribery charges against the 26 people and corporations, including Okada and Soriano, one of the incorporators of Platinum Gaming and Entertainment Corp.
“We were able to confirm that there were payments made to Mr. Soriano, the $40 million paid in 2010, in the investigation …. But the problem is while the $40-million payment—which was being made to appear allegedly as consultancy fees and others—was established, we were unable to establish the purpose of the payments because the witnesses were reluctant (to talk),” she told reporters.
De Lima said there were “indications that there might be something anomalous” in these payments.
She said the $40-million payment to Soriano entered the books of Universal as a consultancy fee or payment in the settlement of road lots issues encountered by Eagle I. But she said the road issue was settled without any cash transaction.
De Lima also pointed to foreign news reports as saying that the $25 million was declared as payment by mistake—the $5 million as unauthorized payment and $10 million was circulated back to Universal as compensation for loss.
“So where is the $10 million? Where did it go to? So the $10 million is being traced,” the justice secretary said.
De Lima said that she had directed the NBI to build up the direct bribery case and that the DOJ could tap three Japanese nationals as witnesses.
Asked if Genuino was being investigated, she said the alleged bribes to Soriano happened during his time as the head of Pagcor.
Saying the DOJ had enough evidence to file antidummy cases against the 26 people and corporations, De Lima said the panel found out that Universal had used dummy corporations to comply with nationality requirements under existing laws.
She noted that under the 1987 Constitution, corporations or those owning land in the country should be owned 60 percent by Filipinos. As for gambling operations, she said foreign investment regulations provide for a 40-percent foreign equity and the rest should all be of Filipino ownership.
De Lima said that she would submit a separate confidential report to President Aquino on her “views” based on the findings of the panel.
“For such a big project, this entails everything should be legitimate,” the justice secretary said.
Based on the DOJ-NBI findings, the 26 persons and corporations were recommended to be charged with violating Section 2-A of the Anti-Dummy Law in the 1987 Constitution and the Public Land Act and the same section, this time in relation to the Foreign Investments Act of 1991 and the Seventh Regular Foreign Investment Negative List.
Aside from Okada and Soriano, the others to be charged were Imelda A. Manguiat, Jose Ma. G. Hofileña, Hector M. de Leon Jr., Ramon G. Songco, Carina C. Laforteza, Llewellyn L. Llanilo, Rene Soriano, Andres B. Sta. Maria, Roberto C. San Juan, Jan Celine Abano, Maria Inez C. Togle, Manuel N. Camacho;
Paulo N. Bombase, Roberto A. Suson, Ma. Lourdes S. Go, Victor Emmanuel C. Caindic, Hajime Tokuda, Manabu Kawasaki, Koki Seki, Takeshi Nojima, Tetsutaro Shibata, Ken Taura, Mitsuo Hida, Eagle I, Eagle II, Tiger Resort, Universal, Molly Investments Cooperative U.A., Aruze USA Inc., Future Fortune Limited, Lex Development Corp., Ultralex Holdings Corp. and Platinum.
Lawyers put up 3 firms
In a 36-page report to De Lima, NBI Director Nonnatus Rojas said Universal, through its affiliate Aruze USA Inc., hired SSHG lawyers for the creation of the three corporations.
Universal financed the purchase of real properties by Eagle I within the reclaimed area containing 30 hectares in Entertainment City.
“Eagle I … is not actually qualified to own private lands, not being at least 60-percent wholly owned by Filipino citizens. Instead, it is practically 100-percent foreign-owned, the ownership of which can be ultimately traced to Universal, a Japanese corporation,” Rojas said.
Eagle I came from Molly, which eventually was replaced by Aruze.
Universal also had “overall control” of Eagle I, Eagle II and Tiger Resort, “thus, manifestly showing the intent of incorporators, shareholders and corporate officers of the entities involved in the scheme to willfully and knowingly circumvent Anti-Dummy provisions,” Rojas said.
As for Tiger Resort, its capital composition was 100-percent foreign-owned when the law requires at most a 40-percent foreign equity.
“Yet as with Eagle I, by a scheme consisting of a series of transactions, 100 percent of the ownership of Tiger was transferred or permitted to be transferred to foreigners,” he said.
Investigators said SSHG was hired to “put up the corporate structure of the entities—Eagle I, that will represent Aruze in its ploy to own and operate a casino within the Entertainment City project.
The SSHG lawyers who had incorporated Eagle I and II were Hofileña, Manguiat, De Leon, Songco and Laforteza. For Tiger Resort, the SSHG lawyers involved were Hofileña, Manguiat, Laforteza, Abano and Togle.
“Subsequently, the shares pertaining to SSHG lawyers and corporations owned by SSHG were transferred to … Platinum,” the Rojas report said.
The financial statements of Platinum and other dummy corporations such as Lex Development Corp. and Ultralex—owned by SSHG lawyers—showed that these firms had “no financial capacity to engage in projects as huge as the proposed hotel, casino and resort within the reclaimed area in Parañaque City.”
“From the pieces of evidence gathered, it can be concluded that right from the beginning, Universal is behind the operations of the three corporations specifically Eagle I, Eagle II and Tiger Resort. The synthesis of the different components of these corporations had clearly established that the resources which fueled the operations of these corporations under investigation actually came from Universal,” Rojas said.