DOJ approves estafa case vs Sobrepreña over CJHDevCo.’s unpaid arrears, rentals

Camp John Hay Development Corp. (CJHDevCo) chairman and CEO Robert John L. Sobrepeña. INQUIRER FILE PHOTO

MANILA, Philippines—State-run Bases Conversion and Development Authority has scored a crucial victory after the Department of Justice indicted businessman Robert John L. Sobrepeña in the P1.15-billion estafa case filed by the government agency.

In a press briefing on Wednesday, BCDA president and CEO Arnel Paciano D. Casanova said the favorable resolution of this case was considered a “breakthrough” because one, it proved that fraud was committed by the businessman and that he should be held accountable for his actions as chairman of the Camp John Hay Development Corp. (CJHDevCo). Secondly, it paved the way for the agency to look into all the other dealings that Sobrepeña had entered into.

“We laud the DOJ in this breakthrough decision to make fraudulent businesses accountable to the people and to protect the interest of the public from fraudulent schemes,” Casanova added.

The 36-page DOJ resolution, dated June 10, was penned by Prosecution Attorney Catherina Isabel C. Caeg with recommending approval by Senior Deputy State Prosecutor Richard Anthony D. Fadullon and was approved by Prosecutor General Claro A. Arellano. The prosecutors found probable cause to charge Sobrepeña with the crime of estafa under Article 315 (2) (a) of the Revised Penal Code.

The BCDA earlier claimed that CJHDevco had been delinquent in its payment of rentals and arrears, for the lease of 247 hectares within the John Hay Special Economic Zone (JHSEZ) under a 25-year lease agreement signed between the two parties in 1996.

It would be recalled that under the terms of the 1996 lease agreement, CJHDevCo was supposed to pay an annual rent of P425 million to the BCDA or 5 percent of the gross revenues for the first five years of the lease, whichever was higher.  This meant that for the years 1998, 1999, and 2000, the government agency was supposed to receive P1.275 billion in rentals.

In 1998, however, Sobrepeña claimed that CJHDevCo’s financial operations were adversely affected, thus resulting in losses amounting to a total of P1.445 billion that were increasing daily. This led to the first restructured agreement in 2000.

CJHDevCo, however, concealed the fact that it declared cash dividends amounting to a total of P928 million in the years 1998, 1999, and 2000, BCDA said.

“Data shown in the financial statements of CJHDevCo discloses that in 1998, CJHDevCo could have very well met its rental obligation of P425 million had it chosen to do so, as seen by its acts of disposing P674 million by way of dividends,” the DOJ resolution stated.

It also stated that “in 1999, as revealed in CJHDevCo’s financial statement, CJHDevCo was able to dispose of P250 million representing the amount declared as dividends to its stockholders…In 2000, it can be seen that CJHDevCo also readily disposed of P350 million again in declaring dividends to its stock holders.”

“The total amount utilized by CJHDevCo in declaring dividends, extending cash advances, and assignment of shares during the years 1998, 1999 and 2000 is P1.27 billion,” the resolution further showed. “CJHDevCo deliberately chose not to perform its rental obligations to BCDA despite knowledge of such and existence of retained earnings and other revenue.”

By late 2008, CJHDevco refused outright to make any payments, according to the BCDA. CJHDevco first requested and was eventually allowed in August 1999 to defer payments for leases incurred in 1997 and 1998. This was then followed by three restructuring agreements, which were signed on July 14, 2000, July 18, 2003, and finally, July 1, 2008. It was this last restructuring agreement that CJHDevco had then wanted to rescind to allegedly evade the payment of P3.4 billion in total rental arrears.

Meanwhile, Casanova pointed out that the DOJ’s ruling has now put into question all of CJHDevCo’s former memoranda of agreement with the BCDA as well as all other agreements that CJHDevCo has entered into with its locators, buyers and business partners with Camp John Hay.

“While people languish in poverty we cannot allow unscrupulous businessmen to take advantage. As public servants, BCDA is committed to bring them to justice,” he stressed.

Casanova pointed out that BCDA’s serious efforts to remove fraudulent businesses is a step in the right direction to promote transparent and accountable business practices and at the same time leveling the playing field so that responsible businessmen have a chance to grow.

BCDA has filed several other cases against Sobrepeña, for the collection of the P3.4 billion in rental arrears; a malversation case; and a professional squatting case.

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