British American Tobacco: Holding an empty brag

Now the cat is out of the bag.

In the past few weeks, big shots of one of the world’s largest cigarette company, London-based British American Tobacco, or BAT, which posts yearly net revenue (meaning, minus the duties and excise taxes on its products) of about $27 billion (more than P930 billion), came out in various media reports on its plans in the Philippines, particularly its supposed $200-million investments.

For several years during the entire 10-year cute administration of Gloriaetta, BAT tried hard—and failed—to penetrate the enormous cigarette market in the Philippines, chiefly through a change in the tobacco tax system, called the “sin tax” law.

Enter the Aquino (Part II) administration under our leader, Benigno Simeon (aka BS), and BAT succeeded where it had failed under the previous administration: The government overhauled the “sin tax” law much to BAT’s liking.

We know that BAT delighted in the new overhauled law, because its big shots here, such as James Lafferty, BAT-Philippines general manager, and Robert Eugenio, BAT-Philippines head of corporate and regulatory affairs, crowed about the splendor of the revamped “sin tax” system in media.

Clearly BAT is the only entity in the local tobacco scene, including the millions of tobacco farmers, supporting the Aquino (Part II) administration-inspired, if not dictated, overhaul of the excise tax law on tobacco and liquor.

The reason is obvious: BAT is the 2012 “sin tax” law’s only corporate beneficiary. As things stand in the business scene today, BAT is the only company that, under the new law, gets the preferential tax rate of less than 10 percent.

In comparison, Filipino-owned companies that have been in the tobacco business for the past several decades, but are now in danger of closing shop due to the new law, get a tax increase of almost 350 percent.

GM Lafferty, at one time, claimed that BAT had already invested some $200 million in the Philippines, even being quoted in media reports that the money was “already here 12 months ago,” or during the height of the heated debate over the “sin tax” system.

Still, if you look around, you cannot find any tangible proof of its $200-million investment. Whose pockets the money went into, may be the kind of mischievous comments that you can hear among the guys down here in my barangay.

In subsequent media reports, however, GM Lafferty seemed to change his mind and said that the supposed $200-million “investment” of BAT would be made in the next five years.

He nevertheless changed his mind again in succeeding reports, revealing that BAT was really adopting a wait-and-see attitude, because the new and improved “sin tax” law would take some time, perhaps even several years, to play out.

Meaning, of course, to play out to BAT’s benefit.

In other words, the $40-billion tobacco giant wanted to play it safe here in the Philippines, which in a way meant to the guys down here that it wanted to be able to pull out easily—just in case—without leaving anything behind. We would be left holding the proverbial empty bag.

Yet down here in my barangay, the guys thought that, as we listened to the pontification of our beloved government officials under the Aquino (Part II) administration, the “sin tax” law was really a “health measure,” meaning, it was designed to kill our smoking vice.

Really, we thought that if the “sin tax” law could indeed kill the entire cigarette manufacturing industry in the Philippines, we should all be happy because we all become healthy.

Based on the press releases from Malacañang, here was what our leader, BS, said when he signed the “sin tax” bill into law in December: “Today we sign, finally, a law that will serve as an early Christmas gift for millions of Filipinos… We aim to make health benefits available for all, regardless of wealth, the life of Filipinos is sacred… Many thought it was impossible to pass the Sin Tax Reform Bill: the enemy is strong, loud, organized, and has deep pockets… But like what has been proven time and again: nothing is impossible to a Philippines that is rowing in one direction, has the heart in the right place, and ready to stand on principles.”

I could almost cry, boss, because I took it that the Aquino (Part II) administration only had our health interest in mind when it pushed for the overhaul of the “sin tax” law in Congress.

But with the reports about BAT investment plans in the country, it suddenly became clear that the amended “sin tax” law would serve to encourage the entry of a giant multinational cigarette company into the country.

Where are those supposed health advocates now?

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Our earlier report revealed that former Senator Anna Dominique Coseteng, aka Nikki Coseteng, and finance man Armand Raquel-Santos were caught in an intra-corporate dispute over a small business that teaches “astronomy” to students through a hi-tech interactive projector system.

Reports said that Coseteng and Raquel-Santos were in an amorous relationship before their falling out over the small business.

Over coffee one time, Coseteng told me that, indeed, they were “dating” (her own word), but all the reports about her wrestling control of the business from Raquel-Santos were not true.

She said that, in fact, she provided all the capital—plus the concept and the technical knowhow—for the business, and she only tapped Raquel-Santos to run it.

Coseteng runs the school known as Diliman Preparatory School, which her mother founded in the 1960s. She said the acronym of the school was DPS, which is the same acronym of the SEC-registered company doing the astronomy business, known as Discover and Probe the Skies—yes, DPS.

Based on Coseteng’s story, she accidentally found out that certain employees of DPS were stealing corporate funds. In fact, she already filed cases of “qualified theft” against Raquel-Santos, as the alleged leader of the bunch, and those employees.

She said there was another bank account—opened in the branch of Banco de Oro in Makati, which was mysterious to her, since the DPS had offices in Diliman in Quezon City—in the name of the company that was hidden from her all this time.

In her possession were a number of copies of withdrawal slips, showing amounts of hundreds of thousands of pesos, in which her signatures were obviously forged, because they were all exactly the same, without a single minute variance, which she said was a clear indication of the forgery. Coseteng even showed me the way she signed her name, pointing out the difference between her real signature and the apparent forgery.

Anyway, the cases are now pending, and according to Coseteng, some lawyers already approached her to offer an out-of-court settlement. This is getting interesting. Let’s see.