Fate of tax evasion cases vs Mighty to be decided by DOF, says Dulay
It will be up to the Department of Finance to decide on whether the acceptance of Mighty Corp.’s settlement proposal would lead to the withdrawal of the three tax evasion cases filed against the cigarette firm, Internal Revenue Commissioner Caesar R. Dulay said Thursday.
Dulay said any action on the cases filed by the BIR in the Department of Justice would “depend on the conditions and nature of the approval from the DOF.”
Mighty intends to sell its assets to a unit of Japan Tobacco International for P45 billion and to offer P25 billion to the government as settlement for its reported P37.88-billion tax liability.
However, Mighty would need to go through the Philippine Competition Commission first before it could push through with the sale, said the antitrust body’s chair, Arsenio M. Balisacan.
“Given the reported value of the transaction exceeding the mandatory notification threshold of P1 billion, the parties will have to notify the PCC and get its approval before consummating the transaction,” Balisacan told the Inquirer.
A Department of Finance statement on Wednesday quoted Mighty president Oscar Barrientos as saying the firm was expecting to seal a deal with JTI by July 20.
Article continues after this advertisement“I understand there was a pre-notification consultation with our merger and acquisition office but I could not confirm yet whether the parties have already filed the notification forms, Balisacan said.
Article continues after this advertisementA source said antitrust rules would have to determine if JTI can buy Mighty without creating a monopoly or a duopoly.
Balisacan said “part of the notification requirements is the disclosure of the ultimate parent entity of the parties.”
In a statement, JTI confirmed it had “entered into exclusive talks with Mighty Corp. on the sale of its cigarette manufacturing and distribution business and assets.”
A source said that since JTI’s parent firm Japan Tobacco was partly owned by the “conservative” Japanese government, it might buy Mighty’s assets only when the tax evasion charges were cleared.
