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Biz Buzz: Costly computer glitch

/ 12:22 AM July 11, 2016

A COMPUTER glitch at RCBC Forex Brokers Corp. is being blamed for the embarrassing fiasco that led to the filing of anti-money laundering charges against one of the firm’s long-time clients. For some strange reason, company insiders say the computer software used to encode daily forex transactions erroneously reported that businessman Antonio Tiu, president and CEO of listed firm AgriNurture Inc., bought $20 million instead of $20,000 in an over-the-counter transaction on Dec. 10, 2008.

An internal probe by RCBC’s forex unit allegedly showed that the company’s computer software reported at least three erroneous transactions on that day, including Tiu’s. In short, the system allegedly inputted the wrong amount in the name of the wrong person and address and included these in the list of suspicious transactions submitted to the Anti-Money Laundering Council (AMLC).

It wasn’t until seven years later—at the height of the Senate probe against former Vice President Jejomar Binay in 2015—that the glaring error would haunt Tiu. The nonexistent $20-million forex transaction was used by AMLC to charge him and freeze more than 30 personal and corporate bank accounts. While Tiu had been calling RCBC Forex’s attention since the error’s discovery, it remains a mystery why it took the firm almost two years to admit fault and rectify the mistake. When it finally decided to issue the certification, it only did so a few days after the May 9 polls.

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Now, these questions come to mind: How many more erroneous transactions were recorded as a result of the forex firm’s computer glitch? Will these also warrant AMLC investigation and subsequent filing of money-laundering charges? What safeguards are in place to ensure that similar mistakes could be avoided in the future? And what is RCBC Forex doing to help clients like Tiu who is currently facing prosecution due to its computer error?

On AMLC’s part, it’s still unclear whether Executive Director Julia Bacay-Abad would finally withdraw the case against Tiu following RCBC’s revelation. Lately, there seems to be a lot of bad blood between the two after Tiu filed perjury charges against Abad for allegedly using false information against him. But then, it’s perhaps best for RCBC and Abad to figure it out among themselves. After all, they’re apparently being advised by the same law firm, Biz Buzz learned. Daxim L. Lucas

Drug wars

WHILE President Duterte is waging war against drug lords and their alleged protectors, a different kind of drug war is brewing between legitimate pharmaceutical manufacturers. We’re talking about the simmering tension between the local unit of American multinational Pfizer and RiteMed, a leading “uni-branded” line of medicines under the Campos family-owned Unilab.

Recently, Pfizer’s legal counsel sent a demand letter to RiteMed, asking the company to delete its posts on social media about the price comparison of its products with Pfizer’s. These posts showed that RiteMed’s essential medicines for hypertension, high cholesterol, pain and antibiotics were almost 50 percent cheaper than Pfizer’s. For example, Pfizer’s pain reliever Ponstan (Mefenamic acid 500 mg tablet) priced at P35.75 is shown opposite an equivalent RiteMed product retailing for P4.50. Pfizer’s antibiotic Zithromax (Azithromycin 500 mg tablet) priced at P151.25 each is shown opposite an equivalent RiteMed product selling for P105.

Pfizer’s argued that such posts caused “grave and irreparable damage and injury” as the posts allegedly “discredited” its products. Facebook (which has been unilaterally taking down posts which don’t “conform” to its standards” especially during the election season and shortly after Duterte’s election) has since deleted RiteMed’s posts.

RiteMed, for its part, rebutted by saying that the posts were “essentially public service announcements and not advertisements,” pursuant to the government objectives embodied in the Cheaper Medicines Act of 2008 and the Generics Act of 1988 of promoting and encouraging the use by Filipino patients of cheaper and quality medicines. From the local firm’s perspective, the fact that there are affordable medicines available to all is certainly information that should be disseminated to serve public interests pursuant to these two laws. Doris Dumlao-Abadilla

E-mail us at bizbuzz@inquirer.com.ph. Get business alerts and a preview of Biz Buzz the evening before it comes out. Text ON INQ BUSINESS to 4467 (P2.50/alert).

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TAGS: Anti-Money Laundering Council, Business, economy, money laundering, News, RCBC Forex Brokers Corp.
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