Govt losing ‘billions’ to 2 businessmen

Two controversial businessmen are a thorn in the government’s side. They have convinced various courts to side with them and continue their business operations at the expense of public interest.

Two government agencies have publicly complained that the state is losing billions of pesos of revenues in Harbour Centre Port Holdings Inc. of  Reghis Romero II and CJH Development Corp. of Robert John “Bob” Sobrepeña.

Home Guaranty Corp. and the Bases Conversion Development Authority have long waged a court battle against Harbour Centre and  CJHDevCo, respectively, to get their rightful claims and share of income from the two private companies. But local courts are preventing the two government agencies from gaining control of the private companies.

HGC president Manuel Sanchez told the media last week that its annual losses had been piling up because of the agency’s failure to recover a significant equity stake in Harbour Centre.

Sanchez said Romero’s R-II Builders Inc. had refused to recognize the 32-percent stake of the government in Harbour Centre. Romero’s R-II Builders holds 68 percent in the company.

“The government has been shortchanged millions and millions of pesos every year because Mr. Reghis Romero doesn’t want to recognize our remaining 32-percent share in HCPHI,” says Sanchez.

Romero, according to Sanchez, had acted and benefited as the full owner of Harbour Centre. “We don’t have any seat in the board although we own 32 percent of the company,” he complains, adding the agency could not track the company’s earnings after the businessman declined to furnish a copy of the financial records.

Romero earlier offered P2.9 billion as reimbursement for the stake in the Smokey Mountain Development Reclamation Project, which Harbour Centre developed with loan guarantee from HGC.

Rpmero said R-II builders, in a letter to Finance Secretary and HGC chairman Cesar Purisima and Vice President Jejomar Binay, offered to settle the Smokey Mountain issue with a P2.9-billion payment and an additional P1.1 billion to Social Security System.

“In order to help the government from further incurring expenses in shouldering the cost of interest expenses amounting to P500,000 per day and assist in the reported liquidity issues of HGC, we are offering this settlement proposal to the government for consideration,” read Romero’s proposal.

HGC rejected the offer. “Mr. Reghis Romero is making an offer which is not acceptable to us, primarily because number one—the amount that he is offering and number two, because of the conflicting claims and most of these claims are actively being pursued in different courts,” Sanchez said.

R-II Builders in 1993 signed a contract with the National Housing Authority to develop Smokey Mountain, with HGC as the government guarantor. R-II builders failed to complete the project, prompting HGC to call on its loan guarantee.

Court of Appeals reversal

The BCDA, meanwhile, warned the state stood to lose billions of pesos in revenues after Court of Appeals Associate Justice Noel Tijam revised the decision of the Arbitral Tribunal of the Philippine Dispute Resolution Center to favor CJHDevCo.

The appellate court’s ruling prompted the BCDA to appeal before the Supreme Court, claiming Tijam’s decision was highly irregular and disadvantageous to the government when he reversed and modified a decision ordering CJHDevCo to vacate Camp John Hay and deliver the leased property, including new constructions and permanent improvements, to the BCDA.

The court also ordered the BCDA to return P1.42 billion in lease payments to CJHDevCO, arguing that the lease contract was pre-terminated before the actual expiration of the contract.

The Baguio Regional Trial Court earlier issued a decision making the tribunal decision binding, executory and non-appealable. But CJHDevCo secured a temporary restraining order from the Court of Appeals stopping the implementation of the final award and modifying the original decision.

The appellate court ruled that the final award declaring CJHDevCo’s obligation to vacate and deliver the leased property to the BCDA was dependent on the agency’s payment of P1.42 billion.

The BCDA claimed that since the start of the lease of government property to CJHDevCo from 1998 to 2000, CJHDevCo had paid more than P1.274 billion in dividends and advances to its stockholders and affiliates. Yet,  CJHDevCo told the BCDA that it was financially incapacitated to make rental payments of at least P1.275 billion in the same period.

E-mail: [email protected] or

[email protected] or

[email protected]

COMMENT DISCLAIMER: Reader comments posted on this Web site are not in any way endorsed by Manila Standard. Comments are views by readers who exercise their right to free expression and they do not necessarily represent or reflect the position or viewpoint of While reserving this publication’s right to delete comments that are deemed offensive, indecent or inconsistent with Manila Standard editorial standards, Manila Standard may not be held liable for any false information posted by readers in this comments section.